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Fundamentals of Futures Crude Oil Prices

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Fundamentals of Crude Oil Futures Prices

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Home Page > Finance > Investing > Futures Fundamentals Of Crude Oil Prices

Fundamentals of Crude Oil Futures Prices

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Posted: Jul 19, 2010 | Comments: 0
| Views: 131 |

To talk about oil trading, I bet that this topic will get much concern from you guys since crude oil futures are among the most popular and widely watched futures markets. You know, there is not a day without the mention of crude oil prices on the television, in newspapers or magazines. This shows the importance of this market to everyone. How about you? If you have decided that speculating in crude oil is something suitable for your risk capital. You will want to learn as much as possible about crude oil futures. There are more than a few things that can affect crude oil prices. Now, together we will check out some fundamentals worth noting if you are trading crude oil futures .

Supply and Demand

Domestic demand and global demand on crude oil price affect both. Over the last decade, emerging markets like China and India have Increased demand for crude oil and so this led many speculators to suggest that demand would outpace supply. On the domestic side, the regular reports from the EIA on crude oil supply and refining activity have direct impact on crude oil price and therefore price crude oil futures volatility. Released weekly, EIA reports and API reports are often key fundamental influences on crude oil futures markets.

OPEC Output

OPEC as all of us know that is The Organization of Petroleum Exporting Countries. From its name, market we all can be sure that its activities wil have strong effect on oil. OPEC production levels and promises for production can also add volatility to crude oil prices. Even a scheduled OPEC meeting and speculation about Increases or cuts to oil production can impact crude oil futures markets.

Weather

That sounds strange weather that can affect oil price, but it will. Storms in the Gulf region of the United States as well as the North Sea can halt production of crude oil drilling on both platforms as well as refineries shut down Which may be anticipating the arrival of a bad storm. Events like Hurricane Katrina stand as strong examples of how weather may have a direct impact on crude oil price.

Geo-Political Issues

Tensions in oil producing regions or near pipelines or refineries can therefore cause changes in crude oil prices as investors weigh the Possibility of supply interruptions. Pipeline attacks or oil tanker hijackings are some past examples. Political tensions and war in the Middle East that is influenced crude oil price in the past.

Refinery Repairs or Issues

I think you can predict this funda mental already. Yes, when pipelines or refineries are shutdown for any reason, this can disrupt supply and cause crude oil prices to fluctuate.

These are situations you will want to be aware of when trading crude oil futures as they can impact crude oil price and increase volatility. It can be worth watching for these events since crude oil futures trading can be incredibly risky even without seeking events as wars or hurricanes to increase volatility. For help, check out energy commodity prices to not miss the market!

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Tony Lee –
About the Author:

I'm a trader in futures trading floor. I'm always eager to learn and share. Reading and searching are my hobbies.

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finance. But believe me investing in the stock market is not that tough, like any other skill it can be learned with gaining enough knowledge about companies and doing some analysis.

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