The Two most popular types of oil contract are Brent Crude from Intercontinental Exchange ICE of London Stock Exchange and US West Texas Intermediate (WTI) which traded out of the New York Mercantile Exchange also known as NYMEX . As these are slightly different blends of oil, the prices vary depending on which one you are trading. It is an agreement to buy or sell crude oil contract at a future date (contract month). Traders make a profit or loss on each trade based on the difference between the price they bought the contract and the price they sold it.
Crude oil is one of the popular commodities to trade for investors around the world. It is a very active market and there are usually no shortage of news to cause the price of oil to move from day-to-day. This presents many good trading opportunities, whether you focus on intra-day trading or you are a longer-term investor. Crude oil can be a volatile market which provides "Technical" trader plenty of opportunities to trades. To calculate your profit or loss, you’ll first need to know the tick value of the contract you're trading. For a standard crude oil contract the tick value is $10. This is because the contract represents 1,000 barrels of oil, and 1,000 barrels multiplied by the $0.01 tick size results in $10. That means for each contract, a one tick movement will result in a profit or loss of $10. If it moves 10 ticks, you win or lose $100. If it moves 10 ticks and you're holding 3 contracts, your profit is $300. Note that crude oil can move several dollars a day (hundreds of ticks). All this are shown automatically on your trading platform either on your PC or Mobile devises.
Factors Influencing Oil Price
Oil price as in any other price movement depend on it Supply and Demand. Oil price is not only depending on how much oil is being pumped out of the ground, but also global economy condition, geographical and political reasons. As economies slow and demand drops, the price of oil and other commodities also tends to follow suit. In early 2016, oil producing countries were over supplying crude oil in storage and fear of China economic slowdown caused oil to trade below $30 a barrel. Other factors influencing oil prices include decisions by the Organisation of Petroleum Exporting Countries (OPEC) and other major oil producing nations on how much oil is produced and supplied to the market.