Last Updated on January 9, 2019
Brent crude is a benchmark that predicts oil prices from all over the globe. It is a composition of Brent blend also known as Brent oil, the forties blend among other many components. Brent oil is characterized by its light nature and is most suitable for the production of petrol and other lightweight petroleum products. It is refined in north Europe.
One of the greatest advantage of Brent oil as compared to all other products is its light density allowing it to flow through pipes. To make money in the trade of Brent crude, there are some of the key things one ought to know. Some of the key things include;
- Knowing the major movers of crude oil. This can help in playing with the prices, the demand and supply of oil to enable a trader to earn through the selling of Brent oil. Shrinking the supply can encourage traders to trade as well as oversupply. Knowing the trend can help predictions and know tomes to mine and tie to reduce the shrinking supply to maximize on the trade.
- Knowing the general chart. This includes knowing the long-term pricing and knowing when the demand rises and reasons for the rise to be well prepared for the times.
- Choosing between Brent and WTI. These are two types of crude originating from different parts which mean they have different percentages of sulfur. The amount of sulfur determines the lightness of a product.
Like any other commodity, there exist reasons for trading Brent oil. Below are some of the reasons.
- For investment, purposes-this can help in times of need like times of economic imbalance as Brent crude holds its value even with time.
- Preparation for times of inflammation- the variations in currency can cause great loses but Brent crude despite the currency hold their value and investing in Brent crude can be profitable even at times of inflation.
- Speculating on the prices of crude products- with the dynamic ever-changing prices, trading Brent crude can be a great way of making business.
Among the many ways to trade Brent crude oil, some of the main ways include the use of CFD (contracts for difference) that are signed between brokers and sellers and include speculations on the future swings of prices of Brent crude.
They exist between the opening and closing of trade and a broker does not necessarily need to have Brent crude shares but the contract offer ways through which they benefit from the random changes in prices of crude. In Brent crude, however, the contracts do not allow for bigger bulks of the barrel. They allow for small quantities like 30 barrels, not a thousand barrels.
Some of the well-known companies involved in the trade of Brent crude include; Sinopec which are the largest oil refiners in Asia and are located in Asia and ExxonMobil which is the company known for the production of the most amount of oil in the whole world. They can produce up to six barrels in a day.