April 3, 2023
Brent Crude Oil is one of the most popular commodities for traders
Brent crude oil is a popular and widely traded commodity in the global financial markets. As one of the most actively traded futures contracts, Brent crude oil attracts a lot of attention in the market. Trading Brent crude oil can be an opportunity for traders who do their research and understand the energy market. In this article, we’ll take a closer look at Brent crude oil and how to trade it in the Philippines.
What is Brent crude oil?
Brent crude oil is a type of crude oil that is extracted from the North Sea. It is a light, sweet crude oil that is widely used as a benchmark for pricing other types of crude oil. Brent crude oil is named after the Brent oil field, which is located in the North Sea off the coast of the United Kingdom. The Brent crude oil futures contract is traded on the Intercontinental Exchange (ICE) and is widely considered to be the global benchmark for crude oil prices.
The top 5 countries that use Brent crude oil the most are:
- United States
- China
- India
- Japan
- South Korea
Why trade Brent crude oil?
There are several reasons why investors and traders choose to trade Brent crude oil:
- Brent crude oil is one of the most actively traded contracts in the world for its liquidity
- The price of Brent crude oil is extremely volatile which means potential for profit for traders who are able to correctly anticipate price movements.
- It can be treated as a diversified trade as it is not directly correlated with other asset classes such as stocks or bonds.
How to trade Brent crude oil in the Philippines?
Trading Brent crude oil in the Philippines can be done through a number of different methods:
- Futures contracts: The most direct way to trade Brent crude oil is through futures contracts, which are traded on the Intercontinental Exchange (ICE). Futures contracts are agreements to buy or sell an underlying asset at a specified price and date in the future.
- Exchange-traded funds (ETFs): Another way to trade Brent crude oil is through exchange-traded funds (ETFs) that track the price of Brent crude oil. These funds can be bought and sold on the Philippine Stock Exchange (PSE).
- Contracts for difference (CFDs): CFDs are derivatives that allow traders to speculate on the price of Brent crude oil without actually owning the underlying asset. CFDs can be traded on online platforms and offer leverage, which means that traders can amplify their potential profits (and losses).
Tips for trading Brent crude oil
Trading Brent crude oil can be challenging, but there are several things that traders can do to increase their chances of success:
- Do research on updated countries and political news that affect Brent crude oil prices.
- Use tools to analyze data to identify potential long or show trends.
- It is important to conduct risk management while executing every trade, as Brent crude oil prices are volatile.
Here are some events that can impact Brent crude oil prices:
- OPEC meetings and decisions on production levels
- Political instability or conflict in major oil-producing countries like the Middle East or Venezuela
- Changes in global oil demand due to economic growth or recession
- Natural disasters that affect oil production, such as hurricanes or earthquakes
- Geopolitical tensions between major oil-producing countries or between oil-producing and oil-consuming countries.
In summary, trading Brent crude oil in the Philippines can potentially lucrative if the correct strategy is in place. Additionally, it also acts as an alternative for your portfolio to stocks and bonds. Therefore, you will not be putting all your eggs in one basket.
