The black viscous liquid, or Crude Oil, was first discovered in 1846 in Eastern Europe. While the whole process of oil production started by refining kerosene from coal, the first commercial oil well was drilled in Romania in 1858. One year later drilling started in other countries, and the USA started producing Crude Oil. With 2000 barrels produced in 1859, production rose to 126 million barrels by 1906 in the US alone. Although significant fields had been discovered worldwide, oil did not replace coal as the primary source of fuel until the mid 1950s. Oil fields are scattered throughout the world, with about 80% of the reserves located in the Middle East.
As oil remains a valuable energy source, its price depends on many factors including demand and supply, geopolitical circumstances, production costs, and many other factors.
The volatility of oil prices has made oil and many of its derivatives attractive instruments for traders worldwide. Currently Crude Oil, natural gas, Brent, ME sour crude oil, and a few others are traded on the main exchange floors.
In 1983 Crude Oil began futures trading on the NYMEX and it is still the most heavily traded commodity. Basically crude futures trade 30 consecutive months, and oil futures are quoted in dollars and cents per barrel. The last trading day is the close of business on the third business day prior to the 25th calendar day of the month proceeding the delivery month. If the 25th calendar day is a non business day, trading ceases on the third business day prior to the last business day proceeding the 25th business day.
Crude Oil is regarded as a highly volatile commodity. While minimum fluctuation is $0.01, a daily movement of 10% is not uncommon. Price is affected heavily by demand and supply; and thus any factors affecting supply could have a sharp effect on oil; on the other hand, economic crises and economic growth may have long term effects on demand which leads to a price change in oil.
Foreign Exchange companies like Easy-Forex offer oil day trading to individual traders. As a trading product oil has some peculiarities as it trades predominantly over the exchanges and there is not a liquid continuous spot market. Even though it is a commodity like Gold or Silver, oil trading is performed in the same way as any other currency. It is Over the Counter (OTC) trading which means that the transaction is performed directly between the two parties involved - the buyer and the seller. There is no third party involved, like in an exchange market.
In today's market place online oil trading is easily accessible to any individual looking for investment opportunities. Trading platforms are less complicated than ever before and with minimal upfront deposits getting started is a straightforward procedure. Look for platforms that offer a sound, uncomplicated platform, are regulated in your region and offer personal service and training.
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