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Commodities

Gain exposure to the global energy market and capitalize on price movements in oil—one of the world’s most traded commodities.

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Trading Oil

With Finoative Ai, you can trade the price movements of the global oil market—one of the key forces powering the world’s economy.

When trading Oil CFDs, you’re not actually buying or selling physical barrels of oil. Instead, you’re speculating on the price movements of the oil market. If global demand increases and oil prices rise, the value of an Oil CFD will also go up. Likewise, if demand drops and oil prices fall, this decline is reflected in the price of the CFD as well.

When you trade indices, you’re not buying the actual stocks—instead, you’re speculating on their price movements through a CFD (Contract for Difference).

Flexible Solutions

Why trade Oil?

  • Tight Spreads - Enjoy competitive pricing with low spreads for cost-effective trading.
  • Leverage Opportunities - Maximize potential returns by trading Oil CFDs with flexible leverage.
  • Instant Execution - Benefit from lightning-fast trade execution with minimal delay.

Flexible Solutions

Tips when trading Oil

  • Oil is priced in US Dollars, making it a globally standardized commodity.
  • 1 CFD lot of oil represents 1,000 barrels, giving traders significant market exposure.
  • Oil prices can differ based on the region of production, due to factors like quality, transport costs, and local demand.
  • WTI (West Texas Intermediate) is the most actively traded oil benchmark, commonly used to represent oil prices in the United States.
  • Brent Crude is the second most traded oil type and serves as the key benchmark for oil pricing in Europe, particularly the North Sea region.

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Oil Trading Examples

#1 Oil sell

Selling oil reflects an expectation that global supply will rise or demand will weaken, leading to a decline in oil prices.

  • Suppose you enter a sell position on oil at $55 per barrel, anticipating that global oil supply will rise or demand will weaken. If the price falls to $52, that’s a $3 drop per barrel. Since 1 CFD lot equals 1,000 barrels, this would result in a $3,000 profit from the downward movement (1,000 barrels × $3).
  • However, if the market moves against your position and the price increases to $56—perhaps due to a supply disruption—you would incur a $1 loss per barrel, leading to a $1,000 loss on that single CFD lot.

#1 Oil buy

Buying oil reflects a positive outlook on global energy demand and the performance of the oil market as a whole.

  • Let’s say you decide to buy oil at $55 per barrel using a CFD. If global supply tightens—perhaps due to geopolitical tension or reduced production—and the price rises to $58, that’s a $3 increase per barrel. Since 1 CFD lot represents 1,000 barrels, that $3 price movement would earn you a profit of $3,000 (1,000 barrels × $3).
  • On the flip side, if oil supply increases globally and the price drops to $54, that’s a $1 loss per barrel. In that case, your position would reflect a $1,000 loss on the same CFD lot. This example highlights how oil traders can profit from price movements—both up and down—without owning the physical commodity.

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CFDs represent intricate financial instruments and carry a substantial risk of incurring rapid financial losses due to their inherent leverage. It is worth noting that an overwhelming majority, precisely 84.43%, of retail investor accounts experience monetary losses when engaging in CFD trading with this particular provider. 

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