In addition to stocks and currencies, crude oil is also often the choice of investors around the world to invest.
In crude oil investment, the Brent Crude Oil and WTI benchmarks are no stranger to investors.
Brent Crude Oil is a high-quality oil extracted from offshore oil fields in the North Sea near European countries such as the United Kingdom and Norway.
WTI or West Texas Intermediate is released by the United States. It is known as a lighter crude oil class or 'light sweet oil' because of its low sulfur content like Brent.
The main difference between these two benchmarks is location, where Brent is the European and Asian market price standard, while WTI is the American market price standard.
What affects the movement of oil prices?
In crude oil trading, the two main fundamentals are supply and demand.
Supply Factors
Outages or maintenance at major refineries around the world must be monitored for their impact on oil supplies.
OPEC production cuts or increases. If OPEC decides to increase production, prices tend to fall because there is a lot of supply in the market.
Geopolitics. When there is tension in the Middle East, prices tend to rise because of their role as the world's leading oil producers
Demand Factors
Oil Consumers. Note the level of demand from the world's largest consumers of oil, such as the US, Europe, China and Japan.
Season. Usually in winter, people will increase the use of oil products to heat the house.
How to trade oil?
Traders who trade oil usually follow a strategy. What is important is to understand the basic factors that influence the price of oil and use a strategy that suits their trading style.
After understanding supply and demand factors, traders can enter the market using technical analysis.
There are various technical indicators and price patterns that can be used to find signals to enter the market. There is no need to use a lot, just use indicators that you understand well.
However, don't forget that risk management is also important in oil investment.
Through this writing, hopefully the reader will gain enlightenment about the oil market, what Brent and WTI are and the difference between the two benchmarks.
