What is US crude oil?
Crude oil is one of the most actively traded commodities in the world as the demand for oil reaches tens of millions of barrels per day. The high demand for this commodity is based on its extensive usage in different industries and for various purposes.
The crude oil is extracted from oil wells which are located underground or deposits located under the sea bed. The crude oil is refined into fuel for vehicles, into heating oil and for production of chemical products which are used for the manufacturing of other products.
There are a couple of basic types of crude oil: Brent Crude Oil and West Texas Intermediate Crude Oil or WTI are the most common. The WTI oil is also referred to as the "light sweet" because it contains low levels of sulphur, it is light-weighted and it represents the primary benchmark for setting oil prices in the Americas.
The US crude oil trading can be executed on commodity exchanges such as the well-known NYMEX with a ticker symbol CL for WTI and the Intercontinental Exchange (ICE) where it is traded under the WTI ticker. The spot price quoted for WTI is per barrel of crude oil.
US crude oil price changes
Crude oil market represents one of the most liquid markets in the world which attracts a vast number of investors and traders. The crude oil price has been through some significant peaks and bottoms. The US crude oil has reached a multi decade peak during the first week of July 2008 with a maximum price at slightly above $145 (£116) which is an all-time high for the US crude oil. And you can see on the price chart that it experienced a five year low in the second half of March 2020 when it closed down to nearly $20 (£16).
The important factors affecting the value of US crude oil are the supply and demand for this commodity. Market sentiment is another factor which can affect crude oil value. However, it can be said that traders can determine profitable trading positions if they carefully evaluate the factors which impact the crude oil price.
How to invest in US crude oil
There are a plethora of ways available for you to benefit from changes in crude oil value. You can decide to invest in crude oil by buying quantities of the commodity in its physical form but keep in mind that you need to store it somewhere.
Buying stocks from oil companies such as ExxonMobil or British Petroleum is also an option to invest in crude oil. However, this investment is subject to non-oil related factors which can affect your portfolio's value and also you may need more capital if you want to make a notable profit.
Derivatives are an acceptable method for trading oil because they overcome some drawbacks of the previous methods. But you should know that with futures and forwards you have a contract which states that delivery will take place in the future unless the deal is closed with an opposite type of trade. Although trading derivatives may look attractive, they can be a bit complicated for non-professional traders and can impose certain types of costs for the trader.
Trading tokenised assets eliminates the negative aspect arising from the primary methods and enables the traders to enjoy other benefits. The tokenised commodities are available on the Currency.com leveraged trading platform and they are developed using blockchain technology.
Using this technology, Currency.com has managed to create tokens for a real asset and these tokens fully replicated the price movements of the underlying commodity. You can now profit with US crude oil trading when you buy or sell the tokenised US crude oil without the complexity involved with derivatives or the risk coming from the stock market.
Not only you can make profits without actually owning the commodity, but you can also make much higher profits as a result of the leverage offered by Currency.com trading platform.
More precisely, Currency.com gives you the chance to speculate with the tokenised US crude oil with a margin as low as 0.5 per cent, which translates into leverage of up to 1:200. You can open a position with capital of only 0.5 per cent. For instance, based on the margin from Currency.com, a trading position worth $30,000 (£21,071) would only require $150 (£120) in capital from you. So, a movement of, for example, 3 per cent would bring you $900 (£722) in profit when you trade with the margin.
Just for clarification, opening a position with $150, without the margin, would bring you a profit of $15 when the price moves 10 per cent. You can see the benefit of using the leverage on Currency.com platform.
Aside from the aspects mentioned above in favour of trading tokenised US crude oil, there is also another benefit that is of particular interest for traders owning Bitcoin or Ethereum. Apart from trading tokenised assets with fiat money, Currency.com offers the possibility for trading tokenised commodities with crypto. Therefore, you no longer have to convert your crypto holding into cash to be able to trade commodities or other assets.
Tokenised US crude oil trading guide
Tokenised US crude oil trading may look like a complicated procedure but in reality, it is a rather simple process composed of a couple of steps, such as:
- Step 1: Register on the Currency.com trading platform by going through the two-factor authentication security.
- Step 2: Because you can trade with crypto or fiat, you need to select whether you will deposit Bitcoin or Ether or you will fund your account with fiat money.
- Step 3: Estimate the value of your position and calculate how much capital you need at 0.5 per cent margin. Also, you can estimate the value of your position based on the capital you have and the size of the leverage offered by Currency.com.
- Step 4: You will open a position following the direction of your price speculation, meaning that when you expect upward movement, you enter a long position. In contrast, a short position is opened with tokenised US crude oil if you expect price decline.
- Step 5: All buy and sell orders will be initially matched between traders on Currency.com platform and the remaining orders are going to be hedged through Capital.com, LMAX Digital or through Binance, Bitstamp, Kraken, NASDAQ, NYSE and Gain Capital.
- Step 6: You can decide to close your position manually and gather the profits made or you can also set a take profits order which is available on the Currency.com platform.
Why trade tokenised US Crude Oil with Currency.com?
US crude oil trading at Currency.com tokenised securities exchange has a number of advantages. Tokenised securities 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.
- One-stop crypto trading platform
Trade tokenised US crude oil with Bitcoin or Ethereum. Benefit from the commodity's price movements without turning your crypto assets into fiat.
Trade tokenised US crude oil with a tight market spread, benefit from maker rebates and competitive taker fees.
Experienced traders can trade the world's top markets, like US crude oil, with up to 1:200 leverage.
- Effective risk management
Manage your risks and secure your profits with stop loss and take profit orders. Save your assets with negative balance protection.
We have a scalable and low latency order management system, which can execute 50 million trades per second.
Currency.com operates under new Belarusian regulation with best-in-class AML and KYC laws. Regulatory details and fees are upfront.