U.S. crude oil is an attractive asset for traders because of its high liquidity, volatility, and ability to trade 24 hours a day. Its price is influenced by a range of factors, including global demand and supply, geopolitical tensions and economic indicators. U.S. crude typically trades at a slight discount compared to Brent crude from the North Sea due to the quality and location of the two commodities. So this article will talk about it in detail: What is US crude oil? And how do investors trade U.S. crude oil futures?
What is US Crude Oil?
U.S. crude oil, also known as U.S. crude oil, referred to as WTI crude oil, is called West Texas Intermediate, also known as Texas light sweet crude oil, which is a kind of light sweet crude oil. Its delivery point is located in Cushing, Oklahoma, USA. U.S. crude oil is considered the benchmark oil for futures pricing in the U.S. oil market. All crude oil produced in or sold to the United States is priced against light, sweet WTI. U.S. crude oil prices reflect changes in U.S. oil prices. U.S. crude oil futures contracts have good liquidity and high price transparency. Today, crude oil futures trading with Brent crude oil and US crude oil as the benchmark oil is the leader in the trading volume of global commodity futures varieties.
Are U.S. Crude Oil Futures Important in International Markets?
The importance of U.S. crude oil futures is mainly reflected in the pricing of oil. U.S. crude oil, as a crude oil benchmark, is a reference price for buyers and sellers of crude oil. All crude oil produced in the United States or sold to the United States is priced with US crude oil as the benchmark oil. Usually when we learn about oil price trends from media reports, we often see US crude oil prices.
From the perspective of market structure, while affected by the US policy of restricting crude oil exports, US crude oil prices are more likely to be affected by local supply and demand. US crude oil is often regarded as a hedging product for the US crude oil market. U.S. crude oil futures contracts have high liquidity and transparent prices. On the New York Mercantile Exchange (NYMEX), its crude oil futures pricing is based on US crude oil as the benchmark oil. The price of U.S. crude oil mainly reflects the market supply and demand in Cushing, Oklahoma, the world's largest oil trading and logistics center, so it is also regarded by many investors as the benchmark price for measuring changes in crude oil prices in the international energy market.
From an inflation point of view, the price of oil affects our lives. Because petroleum products cover our basic necessities of life. Gasoline and diesel oil extracted from petroleum are the main energy sources for transportation and electricity. All plastic products, chemical fibers for clothing, cosmetics, detergents, and pharmaceuticals are associated with petroleum by-products. Therefore, when oil prices rise, inflation will increase, and when oil prices fall, inflationary pressures will also weaken.
3. How do investors trade U.S. crude oil futures?
There are several types of people involved in U.S. crude oil futures trading, including: oil producers, refiners, speculators, hedgers and traders. U.S. crude oil futures is a product of the New York Mercantile Futures Exchange (NYMEX). Its contract size is: 1,000 barrels, and the delivery method is: physical or cash, providing up to 10 times leverage. Although U.S. crude oil futures trading provides leverage, based on the latest price of U.S. crude oil futures: $73 per barrel, the minimum contract is 1 lot of 1,000 barrels, and the margin for each lot of crude oil futures traded is at least $7,300. For domestic investors, the threshold for trading U.S. crude oil futures is too high, so it is not suitable. So is there a product that is more suitable for domestic investors to trade U.S. crude oil futures? U.S. crude oil futures contracts for difference are financial derivatives suitable for domestic investors. Investors do not need to hold any U.S. crude oil futures, and do not need to worry about delivery issues, they can profit from changes in U.S. crude oil futures prices.
For example: Doo Prime's U.S. crude oil futures trading code is CL_2305 (this is the date of year + month, because the futures need to be swapped, so the number will change), the maximum leverage is 50 times, and the minimum can be traded with 0.01 lots. Interested investors can first go to the Doo Prime official website to open a demo account for practice trading. In addition to US crude oil futures trading, this platform can also trade Brent crude oil futures, providing more crude oil futures Trading opportunities.
The above is the whole content of "What is U.S. crude oil? How do investors trade U.S. crude oil futures?", I hope it will be helpful to all investors. In addition to knowing how to trade U.S. crude oil futures, investors also need to learn some necessary trading skills. There are many skills that need to be mastered if you want to trade U.S. crude oil futures. Investors can learn some practical skills that suit them, use technical analysis to grasp specific trading points, and set a reasonable stop-loss and take-profit range. Do more simulated transactions and stick to these skills, investors can obtain satisfactory returns.