Oil is very quickly earning the crown as the most important geopolitical asset. The energy sector as a whole has been soaring, and investors are scrambling for a piece of the action.
Although oil prices just recently saw a strong pullback, triple-digit oil is likely here to stay, and it is causing pain at the pump and everywhere else. Soaring oil prices doesn’t have to be a disaster – with PrimeXBTrising oil prices can equally mean opportunity.
Here is information on how to safely trade oil as global market volatility increases.
OPEC, War & The Pandemic: The Perfect Storm
Strong demand following the pandemic helped to push oil prices to highs not seen since The Great Recession. While the trend was already beginning to blossom and inflation has since spiraled increasingly out of control, the war in Ukraine has prompted an enormous disruption in where the world gets its oil supply.
The European Union, for example, has been phasing out oil exports from Russia. Sanctions will prevent as much as 90% of Russian oil from entering other European countries. The ban further constrains the global supply of oil, which is already stretched thin due to two years of pandemic-related lockdowns. During this time, OPEC slashed production significantly. OPEC stands for the Organization of the Petroleum Exporting Countrieswhich includes 13 oil-producing countries.
Crude oil must be refined into other products like gasoline. The refining capacity of oil was crippled during COVID. The Biden administration also chose to nix the Keystone pipeline, which would have introduced a more stable and steady supply of crude oil to the United States. Instead, the entire world is experiencing a dramatic energy crisis which is contributing to record inflation.
Oil Contracts in the Portfolio
But soaring oil prices doesn’t have to only be a pain at the pump or when heating your home. It can also be a profitable trade – long or short. Being long energy like Brent or Crude oil, natural gas, or other energy products has been a boon for profits over the last year. Crude oil is up more than 500% from pandemic lows and up more than 75% in 2022 alone.
Energy commodities aren’t immune to the recent market volatility, however. Crude oil prices recently saw a 10% single-day decline, taking prices back to below $100 a barrel for the first time in months. PrimeXBT provides the flexibility to add both long and short positions to your portfolio.
JP Morgan used the quoted term to describe a worst-case cut scenario by Russia, which could send the price per barrel to over $380. The price of gasoline could more than triple from recent highs.
Trading Brent And Crude Oil At PrimeXBT
Trading Crude and Brent oil, along with natural gas, gold, silver, forex currencies, stock indices, and crypto, is possible using the all-in-one margin trading solution PrimeXBT. PrimeXBT provides traders with the ability to build a risk-averse and highly profitable portfolio of uncorrelated assets designed to withstand any macro conditions. Users are able to open both long and short positions and use leverage.
Built-in technical analysis tools let traders assess the market and trend, then take a position accordingly. Combined with technical indicators, these tools can help confirm signals or tip-off traders when a trend changes. All of these tools, plus many more, are available using the free PrimeXBT mobile app for Android and iOS smartphone users. From buying crypto to copy trading and everything in between, the trading platform allows for a multitude of opportunities.