Have investors heard what crude oil futures are? As for crude oil, in addition to spot goods, we often see the words crude oil futures on the news. Investors should understand what it is, but do investors really understand what crude oil futures are? Therefore, this article will take investors to understand how to buy crude oil futures? And what are the factors that affect the price of crude oil futures? For your reference.
1. How to buy crude oil futures?
Seeing this, I wonder if investors are eager to try trading crude oil futures? So the question is, what channels can domestic investors invest in crude oil futures? Here, this article lists several more common methods, come and see how to buy crude oil futures!
1. How to buy crude oil futures: Domestic brokers
First of all, investors can directly trade crude oil futures issued by domestic futures exchanges through domestic futures merchants, or directly place orders for overseas futures through domestic brokerages. The only thing to pay attention to is the price of domestic crude oil futures. The trading volume is very low, which also means that if investors want to buy or sell the futures, they are likely to face liquidity risks and excessive bid-ask spreads. And if you place an order for overseas futures through a domestic brokerage, you may be charged a higher handling fee for re-entrustment!
2. How to buy crude oil futures: Overseas brokers
Don't want to be charged higher fees by domestic brokerages? Then investors can also place orders directly through overseas brokerages. The order interface of overseas brokerages is usually more beautiful than domestic ones, and most of the overseas brokerages now have software that supports the Chinese version, allowing investors to quickly and accurately place orders. Trade crude oil futures commodities that investors want!
3. How to buy crude oil futures: ETF
If investors do not want to trade crude oil futures through futures, investors may wish to try ETFs that trade crude oil futures. At present, there are 3 ETFs related to crude oil in the world, and one of them is an inverse ETF. Therefore, if investors If you are bullish on the future direction of crude oil, you can consider investing in crude oil futures ETFs! The trading rules of crude oil ETF are the same as those of other listed products, so it is very easy for investors to get started.
4. How to buy crude oil futures: CFD
Crude oil CFD refers to crude oil contract for difference, also known as CFD crude oil, which is a financial derivative commodity based on crude oil futures or spot. Through crude oil CFD, investors do not need to actually hold crude oil futures or spot positions, but can trade their price changes. Due to its advantages such as flexible leverage, contract specifications and two-way trading, crude oil CFD has been popular among ordinary investors in recent years. For example, you can trade U.S. crude oil and Brent crude oil futures on the Doo Prime platform. To trade one lot of U.S. crude oil futures, the margin is as follows: The latest price of U.S. crude oil is $72/barrel, the contract size is 1,000 barrels, and the leverage is 50 times, so the margin for trading one lot of US crude oil futures is =72*1000*1÷50=1440 US dollars.
2. What are the factors that affect the price of crude oil futures?
1. Factors affecting the price of crude oil futures: supply
Changes in the supply and demand side are factors that greatly affect the price of crude oil futures. Let’s talk about the impact on the supply side first. Among them, OPEC is the most influential. Although the oil production of OPEC countries only accounts for about 40% of global production, However, due to factors such as the lower oil production costs of OPEC member countries, the comprehensive adjustment of production by OPEC, and the higher spare capacity of OPEC countries, OPEC's pricing power is actually better than that of non-OPEC countries. Based on the above, on the supply side, OPEC has a decisive voice. However, with the advancement of drilling technology in recent years, oil fields around the world have been discovered one after another, which has more or less affected OPEC's influence on supply.
2. Factors affecting the price of crude oil futures: demand
After reading the supply, let’s talk about the factors that affect the price of crude oil futures. Generally speaking, if the economies are ranked, the world’s largest crude oil consumption economies are the United States, China, and the European Union. More than 50% of oil consumption means that when the economic conditions of these three economies change, it will have a major impact on the price of crude oil futures. Taking China as an example, during the epidemic, many zero-clearing measures have caused many This has severely hit China's domestic demand and tourism oil demand, which to some extent also suppressed the rise in oil prices, and with China's major actions to unblock, it is expected that oil demand will return to track, which will promote the rise in oil prices rebound.
3. Factors affecting the price of crude oil futures: crude oil inventory
The relationship between crude oil inventory and crude oil futures price should be quite easy to understand. When demand falls and crude oil production is less than supply, it will cause the accumulation of crude oil inventory, which will lower the price of crude oil futures. Among them, the most impressive one must be The negative oil price event in May 2020, when the epidemic caused a global blockade, the supply far exceeded the demand, and many futures holders chose to sell their near-month contracts in order to avoid physical delivery. Under the influence of insufficient storage space, the first negative oil price event in history appeared. This is the best example of crude oil inventory affecting crude oil futures. In addition to the commercial crude oil inventories announced by EIA, the strategic oil reserves of various countries can also be regarded as a part of crude oil inventories.
4. Factors affecting the price of crude oil futures: exchange rate
The exchange rate here refers to the factors that the U.S. dollar affects the crude oil futures price. Just like gold is denominated in U.S. dollars, the price of gold and the value of the U.S. dollar have an inverse relationship. Crude oil is also denominated in U.S. dollars. Therefore, when the U.S. dollar depreciates, it will More dollars must be used to buy crude oil, which will cause the price of crude oil futures to rise, and vice versa. The attractiveness will increase relatively, and the demand will push up the price; and from the perspective of suppliers, once the dollar depreciates, the income of crude oil suppliers will decrease, which will increase their incentives to raise prices. From the above three perspectives, we can all get the result that the US dollar and crude oil futures prices present an inverse relationship.
5. Factors affecting crude oil futures prices: geopolitics
The last factor that I want to introduce that affects the price of crude oil futures is the influence of geopolitics. The most famous example is the three oil crises. The change of the fragile political landscape drives the sharp rise in crude oil prices, and the Ukrainian-Russian War in 2022 It also leads to rising oil prices, increasing difficulties in production and transportation, or retaliatory production cuts, and restrictions on export trade, all of which will lead to rising crude oil futures prices. As an investor, you must not ignore the impact of geopolitics.
Seeing this, I wonder if everyone has a deeper understanding of crude oil futures? Although relatively few people are exposed to crude oil futures in China, in the global financial market, crude oil futures will affect many levels! This article not only introduces you to what crude oil futures are, but also sorts out how to buy crude oil futures, and what factors affect the price of crude oil futures, so that investors can understand what crude oil futures is, and will continue to bring investors More introductions about commodity futures!