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  1. #1
    Junior Member

    Hot Crude Oil Trading !!!

    I am starting a new thread about Crude Oil trading commentary and daily analyses. I will write regularly here as the Crude Oil is my favorite asset and I trade exclusively only crude oil. Firstly I have to stress that there exist two different types of tradable crude oil products – Brent Oil and West Texas Oil. They are finally absolutely the same product but distributed in different places.

    Brent oil is traded in London and Texas oil is traded mostly in USA. This is a long story to explain why they exist both in the same time, but as they are here we have to know how to trade them. They are highly correlated in their prices but I have to point that their price is different and also they price behaviour could be a bit different. The unit of trading is one barrel. One oil barrel is 159 liters in the most known units. The Brent oil price is about 23$ or 20% higher than the US Texas oil now and this difference will continue to exist as there are a lot of reasons for that. I personally prefer trading Brent as it has low spreads and higher intraday volatility.

    The Brent oil is now at the higher point since April last year but is still far from its all time high in 2008. It has a strong bull trend last two months, but in my view will correct very soon. Long term, there are two driving forces for its price – supply and demand. As the demand increase from the developing countries the supply is major driving force now and it is difficult to predict the exact trend, but definitely long term the price will go only up up up! That’s why I trade mostly long positions in oil after some downside shocks. If you have any questions I am open for discussions!

  2. #2
    Solid Member Peter Green's Avatar
    Great thread albert! Congratulation for your efforts to explain those interesting data! I didn’t know about that difference between the two oil assets. Very interesting and strange!? Why it exist? Aren’t there any arbitrage traders to close the gap??

  3. #3
    Junior Member
    The oil selloff started today. It is too early to search for buy opportunities. Let’s see tomorrow price action before entering. It is possible that this correction is of bigger order and will continue more than 2-3 days, so we have to be cautious.

  4. #4
    Senior Member Grae's Avatar
    This is great information albert. I will be keen to learn more.

    Quote Originally Posted by albert View Post
    The oil selloff started today. It is too early to search for buy opportunities. Let’s see tomorrow price action before entering. It is possible that this correction is of bigger order and will continue more than 2-3 days, so we have to be cautious.

  5. #5
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    Brent crude oil fell to lowest level in 2013. This sharp decrease in its value was due projected increase in Saudi arabian oil ouput. It is reported that S.A will increase its output to meet Chinese demand. Even though, this report is not yet confirmed but it affected oil prices significantly. Another big reason of this fall is U.S fed reserve stimulus program which may end due to growing disagreement.
    Only support found by Brent is current situation of Iran.

  6. #6
    Veteran Member uj.forex's Avatar
    does crude oil follow the technical indicators obediently or not? such as, trendlines, EMAs, etc... or is it just totally demand/supply based thing to trade..

  7. #7
    Junior Member
    Crude oil is normal market as all other liquid markets. I think there could be applied the technical indicators. It is not totally demand/supply controlled as there are a huge number of speculators playing with it, without real delivery of the product, so I think it could be traded quite well. I don’t like indicators because for me the price alone is the best indicator. We have to know that crude oil is highly volatile instrument and has to be traded with cautious.

  8. #8
    Junior Member Aravins's Avatar
    Brent oil is approaching now 108 level and is very close to 105-106 support zone. I think it will stop its decline there and will reverse its trend again higher. As the volatility is great in this instrument more experience is needed to find the best entry points and to achieve good return!

  9. #9
    Specialist Member LesterK's Avatar
    I am surprised that the crude oil is so low now! Could somebody explain what could be the reason for the last big decline? Decrease of demand in Asia or something else?

  10. #10
    Senior Member LeeChang's Avatar
    Brent Oil is now very close to its 2012 autumn low at about 105$ per barrel and I think it will find there strong support. My opinion is Monthly calls in oil will be highly favorable!

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