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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) |
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5 |
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6 |
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5 |
| Commodities (min stake) |
£1 |
£1 |
£1 |
£1 |
£0.50 |
£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 - 21 May 2012
In the crude oil markets, it didn't seem to matter that the dollar was under pressure on Friday, even though this would usually support the price of black gold.
Instead, weak US economic fundamentals continued to dominate the energy sector, which was already spooked by fears over reduced European oil demand.
In the end, WTI crude prices fell by $1.38 to $91.48, but not before touching $90.93, the lowest point since 3 November last year.
Spread Betting on Crude Oil - 18 May 2012
The price of crude oil continued its decline yesterday by moving in the opposite direction to gold after the weak US manufacturing figures.
As the fundamental picture begins to suggest that there could be a harsh contraction in economic activity, the bears seem happy with the adage 'Sell in May and go away'. Currently, Brent crude oil futures are trading at $106.76.
Spread Betting on Crude Oil - 17 May 2012
The price of crude oil continued its downward trajectory yesterday. Traders factored in further supply increases and diminished global demand.
US crude oil also fell as inventories increased by 2.1 million barrels against an expected increase of 1.4 million barrels.
Spread Betting on Crude Oil - 16 May 2012
Dollar strength and increased supply data from the API kept the downward pressure on crude oil prices. The June contract is now firmly below the $93 level.
Data from the American Petroleum Institute showed that supplies have surged and traders are now re-pricing expectations for today's EIA supply data.
Spread Betting on Crude Oil - 15 May 2012
Crude oil made fresh lows for the year yesterday, shedding $1.41 to close at $94.20. Sentiment remains sharply negative and it doesn’t look like this will be changing any time soon.
With turmoil in Europe and slowing Chinese growth, demand for the black gold is set to remain weak.
In addition, mounting supplies from OPEC and expectations of another increase in US stockpiles, are keeping crude oil futures on a downward trajectory.
Spread Betting on Crude Oil - 14 May 2012
US crude oil futures continue to hold below the $96 level. Prices are being pressured by the slow down in China, turmoil surrounding Greece and the news from OPEC that supplies are 8% higher than consumer demand.
With more than ample supplies and negative cues in the global economy sapping demand, the price of crude looks set to remain under pressure for some time.
Spread Betting on Crude Oil - 11 May 2012
The price of US crude oil futures saw a timid rebound of $0.63 to $97.08 yesterday. This was, by and large, driven by a rally in the global shares markets, coupled with a slightly weaker US dollar.
It might also be the case that, after the steep fall from a high of $106.43, the market could have been expected to take a breather.
Nevertheless, the short term trend remains firmly bearish, so yet another attempt to break convincingly below $96.00 could be on the cards.
Spread Betting on Crude Oil - 10 May 2012
The price of US crude oil fell in early trading on fears of an escalation in Greece's debt troubles. However, a mixed bag from the Energy Information Administration's weekly inventories report somehow offered a late recovery.
From a technical analysis point of view, we did have another test of the support just below $95.50. Although a recent low was posted at $95.17, the market saw bargain hunters pushing the price back up. Overall, the US crude oil market lost $0.57 to $96.81.
Spread Betting on Crude Oil - 09 May 2012
Besides the political turmoil in Greece, on Tuesday, we also had the Saudi Oil Minister Ali Naimi saying that oil prices were too high.
That added downward pressure to the US crude oil price which continued its plunge to $97.01, 95¢ lower for the session.
From a technical point of view though, it was the second time US crude oil prices found good support around the $95.50 level and rebounded. Although another test looks underway, watch out for repeated failures to break the support.
Spread Betting on Crude Oil - 08 May 2012
There is no crude oil market commentary today. However you can see the latest energies technical analysis on:
Spread Betting on Crude Oil - 04 May 2012
The price of Nymex crude oil posted a steep fall of $2.68 yesterday, crossing below the short term moving averages and settling at $102.54, a level not seen since 23 April.
Discouraged by the seemingly anaemic US recovery, buyers did not want to take on the extra risk of a potentially bad number in the Non Farm Payrolls report.
Instead they closed their long positions, deciding to wait for further confirmations of growth. This morning Nymex is looking a little pressured, down $0.50 at $102.00.
Spread Betting on Crude Oil - 03 May 2012
The US Department of Energy released its weekly oil inventories report yesterday, showing a rise of 2.8 million barrels in crude stocks. This was more than analysts' earlier estimates for an increase of 2.3 million barrels.
Perhaps more importantly, the overall level of crude inventories has reached the highest mark since September 1990. This hurt the price of US crude oil by $0.76, falling to a close of $105.22.
In contrast, gasoline stocks fell by 2 million barrels, versus expectations of a drop of 0.9 million barrels, which may have limited the slump in oil prices.
Spread Betting on Crude Oil - 02 May 2012
The economic recovery in the US has continued to remain fairly resilient, as indicated by yesterday's positive manufacturing data, despite speculation of slowing activity.
Crude oil spread betting investors were quick to react, pushing US crude above the $106.00 resistance level and scoring a $1.27 gain for the day, closing at $106.16.
The upcoming reversal of the Seaway pipeline may have also played a supporting role as it could clear the glut in the US crude oil market. This morning US crude is just a little softer at $105.75.
Spread Betting on Crude Oil - 01 May 2012
Growing worries regarding the European economic outlook, as Spain slipped back into recession, weighed on US crude oil prices in yesterday's morning session.
Although the US economic figures also painted a negative picture, a late rebound in the stock market helped the energy sector regain some composure.
In the end, the price of US crude oil closed only marginally down, falling $0.06 to $104.87.
Spread Betting on Crude Oil - 30 April 2012
The price of WTI crude oil was on the back foot on Friday after the US economy showed weaker than expected growth.
However, the usual suspects, a rebounding equity market and a weaker US dollar, reversed the daily trend and pushed crude prices into positive territory, up $0.83 to $104.93.
In addition, some energy investors may have chosen to close their short positions that were established in the morning, unwilling to stay exposed over the weekend.
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 |
| | |
| 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 |
| | |
| 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 |
| | |
| 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
- Brent Crude Oil is traditionally priced in dollars per barrel
- 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, 21 May 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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