As it is now is trading oil? As the price of oil affects the currency market?

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2018-03-22 15:20:11

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Today, oil is a critical component in the global economy. It's not only the raw material for the production of many synthetic materials, without which modern man can not imagine my life, but also acts as a fuel and thus needed to release everything. Many are interested in trade oil and gold. How to trade oil and why it is so important the price of this fuel, we will discuss in today's article.

as of now oil is traded

What is class brand

Oil is not only the key elements of the global energy system, but also one of the most popular trading instruments. In the news often talk about oil prices as the reasons for the problems. So sooner or later any person the question arises, how now trading oil and is it possible to earn some money. Already in the process of initial data collection and analysis, it is clear that quotations on this resource is extremely sensitive to world events. And it makes understanding how now trading oil, even more important, because it gives the idea of what is happening on the planet. Besides speculation on the volatility of the price of «black gold” often there are not just exciting but also profitable occupation.

Oil is a natural mineral that looks like an oily black liquid with a specific smell. It consists of a complex mixture of hydrocarbons. There are several grades of oil. They differ in the composition. To facilitate oil exports were set certain standards. Often the assignment of oil grade associated with the Deposit where it is mined. From the latter depends on the presence of impurities, the sulphur content and the presence of different alkanovich groups. On the world market there are the following oil grades:

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  • Brent. This is perhaps the most famous brand of oil. It is since 1971 the basis for the pricing almost half of the other varieties. It is produced in the North and Norwegian seas.
  • WTI (West Texas Intermediate) or Light Sweet. This grade of oil is considered a benchmark. It is produced in Texas in the United States.
  • Urals. This name is a generalization to refer to oil extracted in territory of the Russian Federation. It is produced in the far East, in Siberia and in the North.
  • Siberian Light. This is another variety of Russian oil. It's a bit more sulfur than previous. This variety is mined in the deposits in Western Siberia and the Khanty-Mansi Autonomous Okrug.
  • Arab Light. This variety is mined in Saudi Arabia.

as oil is traded now

The market

As we have seen, the different varieties differ in their quality characteristics. So the price for them may not be the same. It is formed in the same way as any other commodity based on supply and demand. The most important parameter of this fuel is its density. Light varieties are considered more valuable. This is due to the fact that one can obtain more light oil products such as gasoline. Another characteristic is the sulfur content.

This abundance of varieties makes it difficult to understand how oil is now trading. To facilitate analysis using the reference marks. For Europe – Brent, for the United States – West Texas Intermediate or North Alaskan. Within OPEC before the reference was used Arabian oil. However, inside that organization uses a “basket” of the seven varieties. As for oil from Russia, it is exported under four brands. The most famous of them is the Ural.

all about oil oil trade

Interesting facts

Consider all about oil.

The oil Trade until the 1970s was not so profitable business as it is now. A barrel cost about three American dollars. However, the price rebounded sharply after the announcement of the embargo on the export of Arab oil that occurred in 1973. New price was $ 12.

Another sharp rise occurred in 1981. this year was the Iran-Iraq crisis. The price rose from US $ 14 to 35.

Oil is called “sweet” if the sulfur content in it is low. Such varieties do not require additional costs for processing. Accordingly, “sour” consider oil with a high sulfur content. Such names are connected with the fact that until the late nineteenth century to determine the quality of black gold tried it experts to the taste.

Quotes of the fuel on the new York stock exchange indicate in dollars per barrel, but the oil – in cents per gallon.

The Actual supply is specified in the contract volumes is very rare. Only 1% of the contracts is not for speculation on the stock.

as the price of oil affects the currency exchange market

How now trading oil?

Until the 1970s years, the industry was highly monopolized, so prices were quite stable. The market was long-term contracts. However, such a system was unstable and fell apart at the first crisis. Considering how oil is traded now, it is possible to allocate the following methods:

  • Using exchange-traded futures contracts;
  • Using long-term contracts between the producers and consumers;
  • With the help of contracts which are concluded outside the stock exchange, this market is not tied to the place and is a worlda network of brokers.

Most oil is traded on the new York and London exchanges. The standard volume of the contract amounts to about 1,000 barrels. In the OTC market, standards are not regulated.

trading oil and gold how to trade oil

How is the price of oil?

There are about 200 varieties of this fuel. Those that are standard in certain regions are considered to be highly liquid. Competition for him on the exchanges is almost perfect. Therefore, speaking about how oil is traded now, we are talking primarily about the reference varieties. The cost of the other is usually calculated in relation to them, the exact formula is specified in the specific contract for the purchase or sale. Also take into account the cost of transportation.

As the price of oil affects the currency market?

Quotes on the considered mineral fuels are determined not only by economic laws, and geopolitical conditions. Russia is very dependent on oil prices. If they fall, the ruble depreciates. Exactly the same happens to the U.S. dollar.


Article in other languages:

BE: https://tostpost.com/be/nav-ny-gramadstva/22123-yak-zaraz-targuecca-naftu-yak-cana-na-naftu-plyvae-na-valyutny-rynak.html

DE: https://tostpost.com/de/news-und-gesellschaft/22128-wie-wird-nun-das-l-wie-der-preis-f-r-roh-l-der-auswirkungen-auf-den-de.html

ES: https://tostpost.com/es/noticias-y-sociedad/22147-como-ahora-se-negocia-el-petr-leo-como-el-precio-del-petr-leo-influye-.html

KK: https://tostpost.com/kk/zha-aly-tar-o-am/22117-az-r-sauda-satty-m-nay-ret-nde-m-nay-ba-asy-ser-eted-valyuta-nary-y.html

PL: https://tostpost.com/pl/aktualno-ci-i-spo-ecze-stwo/22069-jak-teraz-handluje-ropa-jak-cena-ropy-wp-ywa-na-rynek-walutowy.html

PT: https://tostpost.com/pt/not-cias-e-sociedade/22071-como-agora-est-petr-leo-como-o-pre-o-do-petr-leo-afeta-o-mercado-de-c-.html

TR: https://tostpost.com/tr/haber-ve-toplum/22124-imdi-oldu-u-gibi-i-lem-g-r-yor-petrol-nas-l-petrol-fiyat-etkiler-forex.html

UK: https://tostpost.com/uk/novini-ta-susp-l-stvo/22098-yak-zaraz-torgu-t-sya-naftu-yak-c-na-na-naftu-vpliva-na-valyutniy-rino.html






Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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