Everything You Need To Know About Crude Oil Trading In India - Part 1
Crude oil is one of the best commodities to trade in India because it is always in demand on the world market. When the price of crude oil goes up or down, it has big effects worldwide. Because of this, crude oil is a popular choice on all commodity markets, both for short-term and long-term traders. India and China are the two countries that use the most crude oil in the world. According to a study done every year by the International Energy Agency, India's demand for crude oil will catch up to China's by 2024. Since there are so many trades in crude oil futures, there is more liquidity. If you want to learn how to trade oil futures or other commodities, this guide is a good place to start. What is crude oil? Crude oil is natural petroleum that has not been refined. It is a fossil fuel made up of deposits of hydrocarbons and organic materials. Two things are driving up the need for crude oil: By refining crude oil, goods like gasoline, kerosene, and diesel, which are in high demand, can be made. It is also used to make steel, fertilisers, and polymers. Crude oil is a fossil fuel that can't be made again. Because of this, it is limited and can't be replaced. Some important facts about the crude oil market Compared to other things, crude oil is more volatile and has longer-lasting trends. But unless you own an oil company like the Indian Oil Corporation (IOC), ONGC, BPCL, etc., trading in crude oil futures is usually done more for speculation than delivery. It's important to know the following things about the crude oil market if you want to trade with oil in a smart way: Crude oil is one of the things that is traded the most all over the world. Since crude oil is used to make a lot of things, when the price of this commodity changes, so do the prices of those things. Oil prices are likely to change a lot more often than most other prices, which makes the oil market especially unstable. But this volatility opens up trading opportunities and makes day trading more profitable. The price of crude oil as a commodity is affected by the following important factors: Just like with other goods, the rules of supply and demand affect the price of crude oil. Costs of production, storage space, and interest rates all have an effect on crude oil prices in a way that makes storage space less important. Recently, the price of oil has been pushed down even more by a rare combination of high and steady demand. OPEC declarations: The Organization of Petroleum Exporting Countries, or OPEC, is made up of the countries that produce the most oil in the world. Some things that OPEC says could change what investors expect and cause crude oil prices to change in the short term. The value of the US dollar: The US is one of the most important countries in the trade of crude oil around the world. So, the current value of the dollar has a big effect on how much crude oil is worth in total. Politics, natural disasters, oil supply lines, and other things in oil-producing areas like the Middle East can also affect prices. More about all of that in the next part.