CFDs Energies

How to Trade Crude Oil

The Crude Oil market is a mature and deep market, with excellent trading liquidity offering traders the opportunity to trade on both the long and short sides, meaning that there are always trading opportunities irrespective of price movement.

Due to global demand and the enormous amount of vital applications that Crude Oil has in the world, it is considered an extremely sensitive and volatile commodity that can jump dramatically in response to heightened political and economic circumstances. This volatility is exacerbated by the fact that much of the world’s Crude Oil emanates from countries located in politically unstable regions.

West Texas Intermediate (WTI) crude oil is the underlying commodity for oil futures on the New York Mercantile Exchange. It is a blend of several types of U.S. light sweet crude oils. WTI is produced in various areas of the United States and refined in the Midwest and along the Gulf Coast. It is lighter and sweeter than Brent crude, The other major global benchmark and therefore usually trades at a premium versus Brent, but not always.

Brent Crude Oil is the trading classification for sweet light crude oil, which made up of a variety of crude blends drawn from the North Sea. It is the leading global price standard in Oil, and is used to price roughly 65% of the global crude oil market. Most oil production that emanates from Europe, Africa and the Middle East and flows westwards is priced in relation to Brent Crude.

NSFX Ltd. offers Crude Oil trading to all clients. Since 2005, Crude Oil has been traded on the electronic Intercontinental Exchange, known as ICE. One contract is equal to 100 barrels and is quoted in USD. In the world of Forex, Crude oil is traded as a CFD using the same quantities relative to ‘barrels’ with USD as a base currency (1 Lot = 100 Barrels).

Brent crude (UKOIL) and WTI crude (USOIL) are the most popular benchmarks in Oil trading. Globally all oil is priced and traded in U.S. Dollar value.

Note: Visit our dedicated page for real life foreign exchange trading examples.


Why trade with NSFX?

NSFX Ltd. recognises that trading Crude Oil is an integral part of many traders’ trading strategy. Consequently, NSFX provides clients with the best possible trading conditions to profit from Crude Oil price movements, including:

  1. Fast execution and the tightest spreads
  2. Multiple platform trading capabilities (Web, desktop, mobile)
  3. Balanced leverage and exposure, 1:100, 1% of transaction value
  4. Trading flexibility – fixed spread or variable ECN spread

Trading Crude Oil at NSFX

The following table outlines Crude Oil trading parameters at NSFX.

*Crude Oil Trading Parameters at NSFX.

Instrument Spread *ECN Spread Leverage Contract Size Min. Trade ECN Min. Trade Roll Sell Roll Buy
UKOIL 6 5 1:100 100 0.1 Lots 0.1 Lots 0.9185 -5.604
USOIL 6 5 1:100 100 0.1 Lots 0.1 Lots 0.89225 -5.604

* These are averages of fluctuating spreads


Crude Oil Rollover – Additional Information

At NSFX, rollovers are only dealt with on a ‘spot’ basis. This means that all positions are settled two business days from inception, as per market rules.

*** This information does not constitute an offer or solicitation and should not be relied on as such to enter into a transaction or for any investment decision. This information is provided for information purposes only. Any opinions expressed in this document represent the views of NSFX at the time of preparation. They are thus subject to change without notice. NSFX believes that the information contained herein is accurate as at the date of publication. However, no warranty of accuracy is given by NSFX and no liability in respect of any errors or omissions, including any third party liability, are accepted by NSFX or any director, officer or employee.