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Spread Betting on Crude Oil |
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Where to Spread Bet on Crude Oil
You can spread bet on Crude Oil with the following companies:
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| UK Crude Oil (spread size) |
5 |
5 |
4 |
4 |
3.5†† |
4 |
5 |
| Commodities (min stake) |
£1 |
£1 |
£1 |
£1 |
£1 |
£0.50 |
£1 |
| Commodities (more available) |
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Commodities spread betting may also be available with other companies - notes.
Crude Oil Spread Betting - Market Review
Spread Betting on Crude Oil - 22 February 2012
Energy markets were buoyant as the Greek bailout ignited the feel good factor in the commodities spread betting markets and crude prices were sent higher.
Considering though that most of the boost came towards the settlement, it could mean that the main driver for black gold is still the situation between Iran and the West. At time of writing, Brent is trading flat on the day at $121.64.
Spread Betting on Crude Oil - 21 February 2012
Black gold had a quiet trading session with the US markets closed due to President’s Day.
Crude prices had a small rally on the back of hopes that a decision in Brussels over Greece’s future wasn’t far off. In addition, confirmation from Iran that oil exports to the UK and France will be stopped raised concerns of further supply disruptions.
At time of writing, the Brent crude oil spread betting market trades at $119.87.
Spread Betting on Crude Oil - 20 February 2012
This morning energy markets are being propped up by the Iranian stand off with the West.
News that they have halted oil exports to the UK and France has caused Brent crude oil to spike back above the $120 a barrel mark, having been as high as $121.00 earlier this morning.
Currently, Brent stands at $120.50 with the near term uptrend still looking firmly in tact.
Spread Betting on Crude Oil - 17 February 2012
There is no crude oil market commentary today. However you can see the latest energies technical analysis on:
Spread Betting on Crude Oil - 16 February 2012
Brent has bucked the trend of other risk assets after being assisted by the rhetoric coming out of Iran who are threatening to stop exports to Europe.
This saw the black stuff rally to above and beyond the $119 level, however this morning the bulls cannot prevent the risk aversion from affecting them as Brent currently trades lower at $118.55.
Spread Betting on Crude Oil - 15 February 2012
Europe’s biggest economy, Germany, posted a better than expected economic sentiment figure yesterday giving traders a boost of confidence and allowing them to ignore Moody’s Investor Services downgrade on a number of Eurozone credit ratings.
This in turn provided good support for crude oil, which was also given a leg up as Israel accused Iran of attacks on its diplomats abroad.
Spread Betting on Crude Oil - 14 February 2012
Brent crude oil dipped in line with the shares spread betting markets yesterday, taking it back below $117, but this morning it is just testing that level as it trades at $116.90 at the time of writing.
The battle between bulls and bears is very fractious at the moment as the Iran issue continues to support the price, whereas the credit rating downgrades today keep a lid on the gains.
Spread Betting on Crude Oil - 13 February 2012
A higher US dollar combined with a lower equity market meant that crude oil struggled to make ground in Friday’s session.
Adding to the fire was a lower revision in the global demand for oil in 2012 by the International Energy Agency, also mentioning that a loss on Iranian crude supplies can easily be replaced. Currently Brent sits at $117.67.
Spread Betting on Crude Oil - 10 February 2012
There is no crude oil market commentary today. However you can see the latest energies technical analysis on:
Spread Betting on Crude Oil - 09 February 2012
Brent had another strong day being lifted above $117. Slowly but surely the commodity is making its way back towards the highs of 2011 when we saw $125 a barrel, which is not a great sign for motorists or even the wider economy for that matter.
Spread Betting on Crude Oil - 08 February 2012
Brent crude oil is looking pretty perky this morning as it puts on another 50 cents, taking it to near the $117 level which it was above towards the end of yesterday.
This morning Brent is at $116.70 and traders will be keeping a keen eye on those inventory numbers later today.
Spread Betting on Crude Oil - 07 February 2012
Friday’s strong rally could not be kept up yesterday and the optimism over heightened demand for US crude oil, on the back of increased jobs, was washed away.
On the other side, Brent posted a gain with a report of increased demand from Asia and also an embargo on Iranian oil pointed to concerns over supplies in Europe. This morning Brent trades at $115.85.
Spread Betting on Crude Oil - 06 February 2012
The pessimistic views relating to the energy sector that had been rife in the markets were soon reversed on Friday after the US employment data came out.
The rise of 243k jobs was much higher than the expected figure of 150k, which pushed the unemployment rate lower to 8.3%, the best figure since February 2009.
This brought investors to the belief that demand will be raised and in turn, caused a hike in the price of a barrel of oil.
Brent crude oil got itself back above the $114 level but this morning it’s struggling to hold onto that ground as it trades at $114.00.
Spread betting and CFD trading carry a high level of risk and you can lose more than your initial deposit so you should ensure spread betting or CFD trading meet your investment objectives and if necessary seek independent advice.
Market Commentry from Financial Spreads.
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Financial Spreads - tax free* trading on over 2,500 spread betting markets. With a Financial Spreads Account you can trade commission free, 24 hours a day on stock market indices, forex, shares commodities and...read review » Financial Spreads.
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Introduction to Crude Oil Spread Betting
Oil is a highly sought after commodity and, along with gold, crude oil is one of the most traded commodities in the financial markets. This is also true when it comes to financial spread betting.
An obvious reason for such a prominent position is the fact that oil products form the basis of much of modern day transportation, power and plastics manufacturing.
Investors who trade in crude oil markets should be aware that they can be volatile. The price of crude oil is often affected by supply factors that include:
- Severe Weather Conditions: for example hurricane season in the Gulf of Mexico
- Conflicts: for example political problems in the Middle East or attacks on pipelines in Nigeria
- OPEC: The Organisation of Petroleum Exporting Countries who try to control supply in order maintain a high price
Other oil price factors include:
- Stock market prices: as the World economy recovered in 2009 shares prices increased. At the same time crude oil prices saw a parallel rise due to the fact that a recovery should lead to an increase in demand for oil. Note that this relationship is not linear, share prices continued to increase during 2010 whilst crude oil pent much of the year stuck in the $70-$80 range
- US Driving Season: America is the number one oil consuming nation and the US Driving Season usually has an impact on oil prices as demand increases
- Weekly Energy Information Administration’s (EIA) supply data:
- Inventory data is usually released every Wednesday at 3.30pm UK time
- The oil spread betting markets are often volatile just before and just after the new data is released
- Low inventories suggest low supply and therefore a possible price increase
- High inventories suggest excess supply and therefore a possible price decrease
Key Crude Oil Markets
There are two major oil markets:
- Brent Crude Oil
- Brent Crude is also known as UK Crude Oil
- It is typically refined in Northwest Europe
- US Crude Oil
- US Crude Oil is also known as WTI (West Texas Intermediate), Nymex Crude Oil and Light Sweet Crude
- US Crude Oil comes from America’s Midwest and the Gulf of Mexico
- It is lighter than Brent crude oil and will generally, but not always, be priced at a small premium due to its higher quality
Spread Betting on Crude Oil Prices to Rise or Fall
If you spread bet on crude oil you can take a long or a short position on the future price of crude oil. So if, after adequate research, you believe that the oil market will rally, you can spread bet on oil to go up. Of course, if you feel that the market will fall, then you can speculate on that too.
Spread Betting on Crude Oil - Leverage
Financial spread betting on oil is leveraged and so whilst your profits are amplified so are losses, you can also lose more than your investment/stake. This means that you should be fully aware of the potential pitfalls before placing any bets.
Spread Betting on Crude Oil – Tax Free Trading*
When you spread bet your profits are free from capital gains tax and income tax.
How to Spread Bet on Crude Oil
As an example, let's suppose you are thinking of speculating on Crude Oil, you look at a financial spread betting site, such as FinancialSpreads, and they are offering the latest spread:
This is an example of how a Crude Oil futures spread betting market works...
| Spread Betting Market | Brent Crude Oil (March) Futures |
| Spread Betting Price | $111.35 - $111.40 |
| This Means | Now you can spread bet on the Brent Crude Oil Futures market settling:
 Above $111.40, or
 Below $111.35
On the expiry date for this 'March' futures market, 13 February 2012.
It is important to bear in mind that, because this is a futures spread bet, your position will automatically close itself when the March Crude Oil futures contracts are closed, 13 February 2012. Note that you can also choose to close your position prior to the expiry date.
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| Traded Units | With spread betting futures markets, trades on the Crude Oil market are made in £x per cent.
Where a cent is $0.01 of the energy's price movement.
E.g. if Crude Oil moves 45¢ ($0.45) then you would lose or win 45 times your stake. |
| Stake | You choose how much you want to stake per cent, e.g. £2 per cent, £4 per cent, £10 per cent etc. |
| Brief Example | For example, if you decided on a stake of £5 per cent and the price of Crude Oil moves by $0.27 (27¢), you would win or lose £5 per cent x 27¢ = £135. |
Worked Example | Going Long of Crude Oil
Online spread betting on the energy market to increase
| You Work Out Whether to Go Long or Short |
Where do you feel Crude Oil will close on 13 February 2012:
Above $111.40? or
Below $111.35?
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| You Might Want to Go Long |
Above $111.40 |
| You Select How Much to Risk, Let's Say You Choose | £2 per cent |
| So Now What? |
- You make a gain of £2 for each cent ($0.01) Brent Crude Oil closes above $111.40
- You make a loss of £2 for every cent ($0.01) Brent Crude Oil settles lower than $111.40
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| If You Are Betting on a Market to Rise Your Profit or Loss = | (Final Value - Opening Value) x stake per cent |
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| Situation 1 | The price of Brent Crude Oil increases and the futures market is revised to $112.02 - $112.07. |
| Time to Take a Profit? | You may now choose to let your position run to expiry or close it, i.e. close your position for a profit. In this instance you choose to close your bet by selling the market at $112.02. |
| Your Profit or Loss = | (Final Value - Opening Value) x stake per cent |
| ($112.02 - $111.40) x £2 per cent |
| $0.62 x £2 per cent |
| 62¢ x £2 per cent |
| Your Profit or Loss = | £124 profit |
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| Situation 2 | Crude Oil slips and the quote for the market is revised and is set at $110.84 - $110.89. |
| Limit the Loss? | You can decide to let your position run to expiry or close it, i.e. close your trade to restrict your losses. For this example, you decide to settle your trade at the current quote and sell at $110.84. |
| Your Profit or Loss = | (Final Value - Opening Value) x stake per cent |
| ($110.84 - $111.40) x £2 per cent |
| -$0.56 x £2 per cent |
| -56¢ x £2 per cent |
| Your Profit or Loss = | -£112 loss |
Fully Worked Trading Example | Taking a Bearish View of Crude Oil
Financial spread betting on the price of Brent Crude Oil to fall
| You Choose to Go Long or Short |
Where do you think Crude Oil will settle on 13 February 2012:
Above $111.40? or
Below $111.35?
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| Let's Assume You Choose to Go Short |
Below $111.35 |
| You Select Your Stake Size, Choosing | £3 per cent |
| What Now? |
- You make a loss of £3 for every cent ($0.01) Brent Crude Oil settles above $111.35
- You make a gain of £3 for every cent ($0.01) Brent Crude Oil closes below $111.35
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| When Betting on a Market to Fall Your Profit or Loss = | (Opening Value - Final Value) x stake per cent |
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| Situation 3 | Crude Oil goes lower and the market becomes $110.96 - $111.01. |
| Time to Take Your Profit? | At this point, you can decide to let your futures trade run to expiry or close it, i.e. close your position to lock in your profit. In this example you decide to settle your bet at the current price by buying at $111.01. |
| Your Profit or Loss = | (Opening Value - Final Value) x stake per cent |
| ($111.35 - $111.01) x £3 per cent |
| $0.34 x £3 per cent |
| 34¢ x £3 per cent |
| Your Profit or Loss = | £102 profit |
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| Situation 4 | The price of a barrel of Crude Oil increases and the quote for the futures market changes to $111.61 - $111.66. |
| Close and Limit Your Loss? | You could opt to keep your futures trade open until expiry or close it, i.e. close your position and restrict your loss. In this instance you opt to close your trade at the current rate and buy the market at $111.66. |
| Your Profit or Loss = | (Opening Value - Final Value) x stake per cent |
| ($111.35 - $111.66) x £3 per cent |
| -$0.31 x £3 per cent |
| -31¢ x £3 per cent |
| Your Profit or Loss = | -£93 loss |
Crude Oil Notes:
- Brent Crude Oil spread betting market as per FinancialSpreads: 18 January 2012
- Most spread betting companies also give you the option of spread betting on Crude Oil in euros per cent and dollars per cent
- In addition, financial spread betting also allows you to access a broad range of other asset classes, for additional details also read:
Where to Trade Crude Oil Tax Free*
You can speculate on Crude Oil tax free* with the following spread betting companies:
With financial spread betting you can lose more than your original stake or investment. Spread betting carries a high level of risk to your capital. Please familiarise yourself with the risks that are involved and before trading, ensure that financial spread betting matches your investment objectives. Seek independent advice where necessary.
Spread Betting on Crude Oil - edited by MJ, 22 February 2012.
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With spread betting you can lose more than your original stake or investment. Spread betting carries a high level of risk to your capital so please familiarise yourself with the risks that are involved and, before trading, ensure that spread betting matches your investment objectives. Seek independent advice where necessary.
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* Based on current UK tax law. Tax law may change and can differ depending on your personal circumstances.
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