What is Brent Crude Oil?
Brent crude oil, Brent Blend or London Brent, refers to the oil extracted from the North Sea oilfields; the Brent, Forties, Oseberg and Ekofisk. This type of oil is characterised as sweet and light, meaning it can be easily processed into gasoline and fuel. Brent oil is 'light' because it has a lower density; and the lower level of sulphur makes it 'sweet'. Brent crude oil has lower transportation costs as it is produced near the sea, unlike other types of crude oil. Brent usually trades at a premium to WTI.
Brent crude oil is one of the main benchmarks used to set global oil prices for the Atlantic basin crude oils; 78% of globally traded or exported crude oil is priced off the Brent benchmark.
Many factors influence the Brent price, critically the supply and demand: an increase in demand can positively affect the oil price when supply is limited. On the other hand if there is a decrease in demand for oil, such as during the coronavirus outbreak, such situations will limit the Brent crude oil price.
Brent Crude Oil price movements in the past
Crude oil is one of the most actively traded commodities in the world. There have been significant fluctuations over the past few years, where the Brent crude oil price climbed to more than $85 in October 2018 and plummeted to decade-long record lows of $27 in March 2020. A combination of decreased economic activity, the coronavirus pandemic and oil price wars were among the leading factors that contributed to the sharp decline in oil prices in 2020.
How to invest in Brent Crude Oil
There are numerous methods to invest in Brent crude oil. One might be to go on the Intercontinental Exchange and buy or sell Brent crude futures. Note that the contract size is 1,000 barrels. It is possible to invest in Brent crude oil is using derivative instruments such as options. With a call or put option, you won't have any obligation for the delivery of the reference asset, but you will have the right to decide whether or not to execute the option. However, such methods can be time-consuming and are more suited to experienced traders.
An alternative instrument is the tokenised commodities option offered on the Currency.com leveraged trading platform. The value of tokenised assets are linked to the value of an underlying asset or commodity, and any change to asset's price is reflected in the value of the tokenised asset. Tokenised assets are based on blockchain technology, which is rooted in distributed ledger technology, enabling easier data storage and record keeping. The tokenisation of real tradable assets increases the efficiency of trading by lowering transaction costs and improving execution speed, and the price can be monitored on the brent crude oil price live chart.
You can execute your trading with tokenised assets using the leverage offered by Currency.com. It should be noted that the leverage is quite high since the required margin for tokenised Brent crude oil is only 0.5 per cent, which transfers to leverage of 1:200. It would mean that when traders plan to buy tokenised Brent crude oil worth $10,000 they need to have only 0.5 per cent available capital or $50.
Tokenised Brent Crude Oil trading guide
Trading tokenised Brent oil is easy and, in many ways, the process is similar to trading other types of securities. There are a few basic steps:
Step 1: visit the Currency.com trading platform and open an account by completing the two-factor authentication security process.
Step 2: choose how much you want to deposit into your account. It is possible to trade with either crypto or with fiat currency.
Step 3: calculate the value of the position you want to open, or you can calculate the size of the position based on your available capital and the percentage margin. For example, a position of $10,000 would require that you have $50 of available capital when you trade tokenised Brent crude oil 1 : 200 (0.5%).
Step 4: positions are opened using the same approach in place at other investment platforms - i.e. taking a long position if a Brent oil price increase is anticipated, or shorting if there is an expected decline in the Brent crude oil price value. The handy Brent crude oil price chart could be used to monitor price movement.
Step 5: Currency.com links the open the trading positions between its clients and all unpaired buy or sell orders that are hedged with Capital.com, LMAX Digital or, if needed, with Binance, Bitstamp, Kraken, NASDAQ, NYSE and Gain Capital.
Step 6: you may also consider placing a take profits order or initiate a stop loss order.
Trade tokenised Brent Crude Oil with Currency.com
Brent crude oil trading at Currency.com tokenised assets exchange has a number of advantages. Tokenised assets are underpinned by robust and immutable blockchain technology. Opening a trade will give you a token that tracks and moves according to the underlying instrument's price.
Trade tokenised Brent Crude Oil with a tight market spread, and benefit from maker rebates and competitive taker fees.
Effective risk management
Manage your risks and secure your profits with stop loss and take profit orders and mitigate any losses with negative balance protection.
Instant order execution
Currency.com has a scalable and low latency order management system, which can execute 50 million trades per second. It is a high-growth, crypto platform seamlessly linking the booming world of cryptocurrencies with the world of traditional financial assets. Powered by simple, slick and intuitive technology, the platform is designed to enable investors to securely buy, trade and invest in popular cryptocurrencies using both crypto and fiat currencies.
Depending on the regulatory perimeters in different countries Currency.com offers different products around digital assets. To help investors trade with confidence, the platform is fitted with robust risk management controls, transparent pricing and extensive financial education content.
Currency Com US LLC is registered with the Financial Crimes Enforcement Network as a Money Services Business. Its parent entity, Currency Com Limited is licensed by the Gibraltar Financial Services Commission as a Distributed Ledger Technology (DLT) Provider. The company has offices located in the US, Belarus, Gibraltar and Ukraine.