One of the most popular and wildly used oil benchmarks, Brent crude oil, is a form of light sweet oil which has low-sulphur and is refined in the north sea of northwest Europe. Brent crude oil is easy to transport and are best suited for refining diesel, gasoline and other products which only requires middle distillates, and because of these features, Brent is widely popular in the global market with two-third of the crude contracts in the international market referenced to it.
Brent crude oil is traded as oil future contracts in which two parties agree to exchange a fixed amount of oil at a pre-defined price on or before a fixed date. This is the most common ways to trade crude oil. The Brent crude oil futures contracts are listed on the ICE Europe exchange. Commodities trading have become a very popular market for traders as it offers traders to befit from price movements of the commodity or act as hedge currency depreciation.
Crude oil Contract Specs
Instrument- Brent oil
Exchange – ICE Futures Europe
Trading hours- 01:00 -22:59
Minimum trade size – 10
Spread – $0.03 over market
What influence the price of Brent Crude oil?
As Brent Crude oil is a high-demand global commodity, there are many factors that can affect the price of Brent crude oil. The commodity market is very active, and traders react to every news and information, which can cause major fluctuation in the price of crude oil. The two most crucial factors which can affect the price of oil are:
- Supply and demand
- market sentiments
The idea of supply and demand is very simple. The price of oil is directly proportional to the demand and inversely proportional to the supply. In a simple word, when demand increases and supply decreases, the price of oil will go up, and when demand decreases and supply increases, the price of oil will fall. The supply and demand cause significant fluctuation in the price of oil. Traders around the world speculate on this price movement
The other key factor that can influence the price of crude oil is the market sentiments. Any news or belief that indicates that demand for oil will rise dramatically at some point in future can cause a rally in oil prices and vice versa.
The single largest influencer of oil is OPEC. OPEC stands for Organization of the Petroleum Exporting Countries. The body is made up of 15contries.the main aim of this body is to coordinate and unify the petroleum policies of its member countries and also to ensure the stabilization of oil market. OPEC decisions and polices can force crude oil prices to rise and fall dramatically.
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