A Review of Spread Betting on Crude Oil Futures

Spread Betting

Crude Oil Spread Betting

The SpreadBets guide to crude oil spread betting:






Where Can I Spread Bet on Crude Oil?




You can trade both US and Brent crude oil with these providers:

Crude Oil

Financial Spreads ETX Capital Spreadex IG Index City Index
UK Oil Daily (Brent) Financial Spreads UK Oil Daily (Brent) ETX Capital UK Oil Daily (Brent) Spreadex UK Oil Daily (Brent) IG Index UK Oil Daily (Brent) City Index UK Oil Daily (Brent)
UK Oil Future (Brent) Financial Spreads UK Oil Future (Brent) ETX Capital UK Oil Future (Brent) Spreadex UK Oil Future (Brent) IG Index UK Oil Future (Brent) City Index UK Oil Future (Brent)
US Oil Daily (WTI) Financial Spreads US Oil Daily (WTI) ETX Capital US Oil Daily (WTI) Spreadex US Oil Daily (WTI) IG Index US Oil Daily (WTI) City Index US Oil Daily (WTI)
US Oil Future (WTI) Financial Spreads US Oil Future (WTI) ETX Capital US Oil Future (WTI) Spreadex US Oil Future (WTI) IG Index US Oil Future (WTI) City Index US Oil Future (WTI)
The above spread betting markets may also be available with other companies. Also see Comparison Table Notes.



Live US Crude Chart





The above chart defaults to US crude oil, if youd like the chart for Brent crude, simply type 'UKOil' in the market field in the above chart (i.e. replace 'USOIL').



About Crude Oil




Along with gold, crude oil is one of the most traded commodities in the financial markets. This is particularly true when it comes to spread betting.

An obvious reason for such a prominent position is the fact that crude oil products form the basis of much of modern day power, transportation and plastics manufacturing. Oil is a highly sought after commodity.

Investors who trade the crude oil markets should aware that they can be volatile.

When spread betting note that there are two major oil markets:
  • Brent Crude Oil, also known in spread betting as UK Crude Oil

  • US Crude Oil, also known as WTI (West Texas Intermediate), Nymex Crude Oil and Light Sweet Crude.

Spread bets on either crude oil market allows an investor to take a long, or a short position on the future price of crude oil. So if, after suitable research, you believe that the oil market will slump, you can spread bet on oil to go down.

Spread betting on oil is leveraged and so whilst you can win more than your initial stake you can also lose more than your initial stake. This means that you should be fully aware of the potential benefits and pitfalls before placing any trades.


An Interesting Look at the Oil Market and Some of the Players in it



The video below takes a look at some of the pros and cons of the Twitter stock.

There are lots of bland trading videos on the web and we do our best to shelter your from the banal and obvious.

IG churn out a good few videos and the interviewees are a varied bunch.

Occasionally though there is a treat and this is certainly one of my current favourites.

Its 17 minutes long but if you have an interest in the oil markets, and some of the players in it, then its worth watching.





User Questions and Answers on Crude Oil



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Factors that Influence the Price of Crude Oil



The price of crude oil is often affected by supply factors that include:
  • Severe Weather Conditions eg Hurricane season in the Gulf of Mexico

  • Conflicts eg potential problems in the Middle East or attacks on pipelines in Nigeria

  • OPEC The Organisation of Petroleum Exporting Countries who attempt to control supply in order maintain a high price
Other oil price factors include:
  • Forex rates - one of the biggest factors affecting the price of crude oil is the exchange rate. Because Oil is traded in US Dollars then, all things being equal, the price of Crude Oil often follows the US Dollar exchange rates.

    If the US Dollar depreciates in value against the Euro and / or Pound then the price of Crude will go up. If the dollar grows stronger, the price drops. This is not guaranteed but it is always worth taking this important correlation into account.

  • Equities prices as the World economy recovers in 2009 and equities prices have increased, oil prices have seen a parallel rise on the basis that a recovery will lead to an increase in oil demand

  • US Driving Season America is the number one oil consuming nation and the US Driving Season is known to have an impact on oil prices as demand increases

  • Weekly US Oil inventory numbers:

    • High inventories suggest excess supply and a possible decrease in price
    • Low inventories suggest low supply and possible increase in price
    • Inventory data is typically released every Wednesday at 3.30pm UK time

More Crude Oil Trading Facts



  1. There are generally two types of crude oil that are traded:

    • Brent Crude Oil which is based on the price settled at the Intercontinental Exchange (ICE), a London based exchange on which futures and options on energy products are traded

    • Nymex Crude Oil (also known as US Crude, WTI or West Texas Intermediate) which is based on the price settled at the New York Mercantile Exchange (Nymex)

    You can normally spread bet on both of these with most spreads companies.

  2. Crude Oil, whether Brent Crude or Nymex, is priced in US$ per barrel

  3. When spread betting on Crude Oil you can trade for as little as 1 per ¢, €1 per ¢ or Dollars per ¢

    If you are betting 2 per ¢ (2 per $0.01) and the price of a barrel moves by $1.50 (150¢) then your profit / loss would alter by 2 per ¢ x 150¢ = 300.

    For a fully worked example see crude oil trading example

  4. Some spread betting companies let you trade two different types of crude oil market

    • A Daily Market, aimed at day traders with narrow spreads

    • A Futures Market where the market is settled in 1-3 months time. With this option the spread is wider.

    However these futures markets can be better value than the daily market if you want to hold on to your bet for the short-medium term.



Where Can I Get Live Spread Betting Prices and Charts for Crude Oil?



The quick chart above gives a useful look at how the market is trending.

Still, for investors spread betting on crude, the above companies have live price updates and charts with more indicators and features.

Example crude oil chart from FinancialSpreads.com

Example candlestick chart



Crude Oil Spread Betting

Crude Oil Spread Betting Example



If you decided to spread bet on a commodity like US crude then, on visiting a company like InterTrader, you might get a price of $102.04 - $102.08.

That means you could speculate on US crude to move higher than $102.08 or to move lower than $102.04.

With spread betting, you trade on every unit the market increases or decreases. Specifically, for the US crude market a unit is $0.01 of the commodity's price movement.

Let's say, for this example, you choose to trade 2 for every cent US crude rises or falls.


Selling - Spread Betting Oil Prices to Rise



If you went long of US crude at $102.08 and the commodity rose then the quote could change to $102.64 - $102.68. In that case, you could close your bet for a profit at $102.64.

Profit/Loss = (settlement level of the market - opening level of the market) x stake per cent
Profit/Loss = ($102.64 - $102.08) x 2 per cent stake
Profit/Loss = $0.56 x 2 per cent
Profit/Loss = 112 profit

However, if the commodity decreased to, for example, $101.60 - $101.64, you could choose to close your bet to limit your losses. Therefore, you'd make a sell trade at $101.60.

So, with the same 2 per cent stake:

Profit/Loss = (settlement level of the market - opening level of the market) x stake per cent
Profit/Loss = ($101.60 - $102.08) x 2 per cent stake
Profit/Loss = -$0.48 x 2 per cent
Profit/Loss = -96 loss


Selling - Spread Betting Oil Prices to Fall



One benefit of spread betting is that you can sell the futures markets.

When we began this example, the market was priced at $102.04 - $102.08.

If you short sold US crude at $102.04 and the commodity fell then the market might be re-priced at $101.35 - $101.39. If that were to happen, you might want to close your trade for a profit at $101.39.

Profit/Loss = (opening level of the market - settlement level of the market) x stake per cent
Profit/Loss = ($102.04 - $101.39) x 2 per cent stake
Profit/Loss = $0.65 x 2 per cent
Profit/Loss = 130 profit

However, if the commodity had moved up to $102.55 - $102.59, you could close your bet to prevent further losses. If this were the case, you'd buy the market at $102.59.

With the same 2 per cent stake:

Profit/Loss = (opening level of the market - settlement level of the market) x stake per cent
Profit/Loss = ($102.04 - $102.59) x 2 per cent stake
Profit/Loss = -$0.55 x 2 per cent
Profit/Loss = -110 loss

  • US Crude (September) spread betting prices quoted as of 25-Jul-14.
  • This is a Futures spread bet and therefore there is a particular expiry date, i.e. when it will close. With this US Crude (September) market the expiry date is 15-Aug-14.
  • For a UK crude oil trading example see, how to spread bet on Brent crude oil.


Advert Financial Spreads Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see Financial Spreads.



Crude Oil Demo Accounts



But what if you want to practice? Well, the companies detailed below provide test accounts. I.e. accounts which let you have a go at spread betting on crude oil futures in a risk-free environment.

Financial Spreads   > Financial Spreads

InterTrader   > InterTrader



'Crude Oil Spread Betting' last update by James White, 20-Feb-2017





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