Category: oil market

Financial spread betting can take a great amount of the risk out of trading and good money can be made. This is a cost effective and tax free (in the UK) way of alternative share trading. It is a method which is used online where the trader is able to speculate without the assistance of a stockbroker.

This is a completely new way of participating in movements on the stock market without having to pay commission to a stock broker, and thereby making larger profits. The actually bet is placed on whether or not share prices will increase or drop.

A spread is a sell or buy price, which is calculated by the spread betting company. It means they add or subtract points from or to an existing live market value and quote that value. For instance if the FTSE is at 4729, they quote a price of say 4727 – 4731, the spread better then places a wager on this price and what they think its movements will be.

To open a new position in the market a very small deposit is required, generally about dollar, euro, pound10 – 40. Each bet is on each point or tick in which the market moves, either up or down. The stake is usually 1 on each point of movement and will represent either profit or loss.

Each financial market has its own minimum and maximum wager per tick. If the wager is placed on the market dropping and increases the spread better loses their wager, if it moves in the opposite direction where he predicted it would go, he makes a profit. It is very important that the spread better understand losses, as well as profits can be substantial. The loss or profit is calculated on the wager multiplied by the amount of points the market drops or increases.

It is very important that the trader understands that in as much as profits can be made, losses can also be incurred and it is not only a case of losing the wager amount, it is multiplied.

The oil market is dominated and manipulated by the OPEC cartel, which controls the lion’s share of the world’s oil reserves and has the lowest production cost. Its collusive actions distort market outcomes and have led to erroneous conclusions about the true state of the oil supply. The oil market is not static. It is highly dynamic.

Supply and demand keep shifting all the time, every minute of the day, which results in an equilibrium that necessitates a new price. The oil market is vibrant and crude oil prices are bobbing up and down like a float on the water. Around the world experts make their analysis and try to explain why. Often they are wrong.

The oil market is sensitive and vulnerable because it is so massive, which in turn keeps alternative energy forms suppressed and undeveloped. And, the substitute energy forms that that have been introduced are not nearly as versatile as petroleum. The oil market is peculiar because of the varying levels of elasticity of the demand and supply in both the short and the long terms. The fluctuations of prices are enormous. The oil market is not immune to a stock market crash, unless oil consumers also are immune. If a stock market crash leads to decreased demand for oil, because people and businesses become poorer, then the price of oil will fall.

The oil market is more politicized than most other markets. Due to the non-renewable nature of the resource, it is a rent to be captured. The oil market is full of smoke that provides perfect cover for corruption. Every price blip calls forth explanations in terms of Chinese demand, more violence in Nigeria’s delta region, cold weather, threats from Venezuela’s Hugo Chavez or heightened tensions over Iran’s nuclear program. The oil market is becoming an increasingly important aspect in finance. As a giant consumer of oil, China must fully exploit financial strategies to counter the fluctuation of oil prices as an important aspect of its strategic planning for energy and resources.