Spread Betting on Crude Oil
Where to Spread Bet on Crude Oil
You can spread bet on Crude Oil with the following companies:
Commodities spread betting may also be available with other companies - notes.
|UK Crude Oil (spread size)
|Commodities (min stake)
|Commodities (more available)
Crude Oil Spread Betting - Market Review
Spread Betting on Crude Oil - 24 May 2013
WTI crude oil started the day on the back foot following the unexpected shrink in Chinese manufacturing figures.
Nevertheless, the market managed to pare its early losses towards the close and even posted a $0.28 gain to $94.10 after the US housing data demonstrated some resilience.
Spread Betting on Crude Oil - 23 May 2013
The US Department of Energy released its weekly oil inventories report yesterday, which indicated a rise of 3 million barrels in gasoline stocks against expectations for a decline of 300,000 barrels.
Energy investors reacted swiftly, sending WTI crude prices sharply lower and, with a stronger dollar accentuated the plunge, the market finished $1.77 down at $94.10.
Spread Betting on Crude Oil - 22 May 2013
With no clear evidence of rising oil demand even though we have entered the US driving season, the price of WTI crude oil fell for a second session yesterday, losing $0.96 to $95.90.
This came despite weakness in the US dollar, which usually offers support, as today's US Department of Energy inventories report is predicted to show another overall climb.
Spread Betting on Crude Oil - 21 May 2013
Brent futures for June delivery closed at $104.74 yesterday, approaching the $105 mark on concerns that rising Middle East tensions will outweigh demand worries.
The market has seen some downward pressure recently on worries about sluggish growth in the key economies where the most Brent is used.
On top of this, inventories have been growing, however, the predicted fall of 400,000 barrels in today's numbers may aid prices if it does turn out to be the case.
Spread Betting on Crude Oil - 20 May 2013
Brent Crude oil for June delivery closed at $104.56 in the last session and was approaching the $105 mark earlier this morning on upbeat economic data and as equity markets continue to impress.
Asian shares are on the up after encouragement from US equities, with sentiment in the world's largest economy hitting a six-year high.
Despite this morning's moves, prices have been weighed on by this year's projected weaker demand as well as increasing stockpiles.
Spread Betting on Crude Oil - 17 May 2013
In commodities spread betting, crude oil bucked the recent trend by spending a day in the black.
It was a volatile session during which the market spent early trading at a loss before finishing strongly and closing at $95.13.
Spread Betting on Crude Oil - 16 May 2013
Crude oil slipped further during yesterday's early trading but managed to claw back losses following an unexpected drop in US stockpiles; 600,000 barrels were wiped off the inventory list.
As a result, the market closed relatively unchanged at $94.30.
Spread Betting on Crude Oil - 15 May 2013
US crude closed $0.96 lower at $94.21 yesterday, as the strengthening dollar made the market more expensive for foreign investors.
Increasingly high inventory levels and sluggish demand was also to blame for the declines.
Spread Betting on Crude Oil - 14 May 2013
The ever increasing supply in an environment that is not raising demand is hampering US crude prices at the moment.
This week may show US stockpiles at their highest levels since the 1930's, whilst growth in the world's most consuming economies, the US and China, still remains sluggish.
Accordingly, the US crude oil futures contract for June delivery closed 0.7% lower at $95.38.
Spread Betting on Crude Oil - 13 May 2013
The strengthening dollar has been hurting the price of US crude recently, with extra downside pressure being added by rising inventory numbers and increased production.
The June futures contract may have closed at $95.88 on Friday but it is considerably lower this morning.
Spread Betting on Crude Oil - 10 May 2013
Improving economic data raised concerns about the potential for more restrictive US monetary policy and had a negative impact on West Texas Intermediate on Thursday.
The June delivery futures contract went as low as $95.35 only to recover later on and close just $0.22 down at $96.39 per barrel.
Spread Betting on Crude Oil - 09 May 2013
A fall in oil inventories at Cushing, one of the largest storage hubs in the US, sparked a continued rally in the price of US crude oil on Wednesday.
In addition, some improved growth numbers out of China will have also fuelled the rise.
The US crude market was even able to close the gap on Brent crude to less than $8 as it closed at $96.50, up 1%.
Spread Betting on Crude Oil - 08 May 2013
US crude saw its first drop in four days yesterday, falling by around $0.30 as the expected news of increasing US stockpiles was confirmed.
Having said that, oil prices did draw some support from the growing tensions between Israel and Syria.
Spread Betting on Crude Oil - 03 May 2013
In commodities trading, the energy sector was undoubtedly revived by signs that US employment may be on the mend and that the downside risk of Europe's recession is being addressed.
As such, WTI crude prices reversed course and headed higher, managing to gain $3.07 to $94.00.
However, job creation remains the Achilles heel in the current environment and many will be hoping that today's US unemployment report doesn't disappoint.
Spread Betting on Crude Oil - 02 May 2013
The US Department of Energy released its weekly stockpiles report which showed a much larger-than-expected rise in crude inventories.
The figure of 6.7 million barrels was significantly higher than the consensus estimate of 1.2 million, with overall oil supplies also skyrocketing to an incredible 82 year high.
As a result, it came as no surprise to see the price of US crude oil plunging $2.12 to $90.92, with extra downside pressure coming from the weak economic data in the US.
Spread Betting on Crude Oil - 01 May 2013
With US crude oil supplies at record highs, it is little surprise that a triple digit price tag remains elusive, despite ongoing news that the American economy is slowly recovering.
As such, expectations that the US Department of Energy will show inventories rising by 1.2 million barrels to another 22 year high pushed the price of WTI crude $1.30 lower to $93.06.
Spread Betting on Crude Oil - 30 April 2013
Growth seems to be the name of the game in the eyes of officials on both sides of the Atlantic.
Whilst the ECB is predicted to cut rates, the Fed is seen reiterating its current easing stance.
The result was heightened optimism in the energy sector and a weakening US dollar, with investors pushing US crude oil prices $1.69 higher to $94.38.
Spread Betting on Crude Oil - 29 April 2013
The ongoing, and mostly positive, US corporate earnings news did not translate into similarly pleasant reading for GDP growth.
As always, the energy sector remained highly sensitive to the overall economy and WTI crude prices retraced $0.30 to $92.90. It’s possible that this week’s FOMC meeting and the non-farm payrolls figures could rebuild the slightly shaken confidence.
Spread Betting on Crude Oil - 26 April 2013
The WTI crude oil market extended its recent gains for the fourth consecutive session yesterday, adding $1.70 to $93.22 after reports of fewer unemployment claims in the US.
Considering the gloomy outlook for the global economy, including renewed questions of whether China is in for a hard landing, energy investors must have welcomed the chance to see crude prices rally.
Spread Betting on Crude Oil - 25 April 2013
While the crude oil inventories for last week indicated a lower than projected build, it was actually the crude products which captured investors' attention.
In particular, gasoline stocks posted their steepest drop in a year and, given that the US driving season will start in a month, this understandably sparked a sharp rally in US crude prices, climbing $2.03 to $91.58 a barrel.
Spread Betting on Crude Oil - 24 April 2013
Nymex crude oil futures managed to recover from an early slump, closing $0.27 into positive territory at $89.51.
Initially, the gloomy outlook on Europe's manufacturing spilled into the energy complex but the US new home sales data saved the day in the afternoon session.
Later today, the US Department of Energy is due to report its weekly crude inventories which are expected to show a rise of 1.8 million barrels.
Spread Betting on Crude Oil - 23 April 2013
Commodities spread betting investors' overall optimism regarding the US economy trumped the slight disappointment in the US housing sector yesterday.
That spilled over into the energy complex and helped push WTI crude oil prices $1.18 up to $89.32.
However, the rally was fairly short lived as overnight figures showed Chinese manufacturing seeing a slowdown in growth, sending crude oil into the red.
Spread Betting on Crude Oil - 22 April 2013
After an early rally, which briefly pushed US crude oil above the $89 mark, we saw a slip back into the red on rather quick profit taking.
The International Monetary Fund's downgrade of US economic growth expectations from 2% to 1.9% may have been behind the sell off, as well as China's estimated slowdown from 8.2% to 8%.
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.
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.
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:
Other oil price factors 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
- 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
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.
|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
|You Might Want to Go Long ||
|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
|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
|Let's Assume You Choose to Go Short||
|You Select Your Stake Size, Choosing ||£3 per cent|
- 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
|When Betting on a Market to Fall Your Profit or Loss = ||(Opening Value - Final Value) x stake per cent |
|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, 24 May 2013.
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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.
* Based on current UK tax law. Tax law may change and can differ depending on your personal circumstances.