To make a profit from crude oil, you do not need to extract or trade it. What is required is just to predict its price movements. After you learn how to perform a fundamental analysis to trade binary options, you need to understand what can have an impact on crude oil prices and how to use the data you get from news reports.
To earn money online has become easy. Presently, anybody can make money on crude oil from home.
Binary option trading ensures a stable income, if you know how to competently deal with this investment.
The point of making money from binary options is that you have to accurately predict future price movements during a certain period of time. For instance, will the oil price go upward next 20 minutes? If your forecast is correct, you get a 70% profit. Even if the price goes up or down by 0.001, you get your 70% net profit.
How to make a profit from oil
Binary options brokerage companies like AnyOption offer to invest in a particular oil grade produced in the U.S.
West Texas Intermediate (WTI) is a major crude oil producer located at Texas, USA. This crude oil is used for production of gasoline, diesel fuel and other oil derivatives being in demand both in the United States and China.
For you to understand the market, it should be noted that the light sweet crude is a benchmark crude oil in the United States.
The crude oil is graded based on chemical composition (sulfur, alkane group, impurities content) depending on the field where the crude is extracted. WTI – also referred to as Texas Light Sweet – is a benchmark in pricing of other crude grades in the western hemisphere. Brent crude serves as a benchmark for European and OPEC market.
To make export easier, the benchmark grades got the names derived either from a crude deposit, or a group of crude deposits, namely heavy Urals and Siberian Light in Russia, Brent in Great Britain, Statfjord in Norway, Kirkuk in Iraq, WTI (Light Sweet) in the United States. Often, a country produces two crude oil grades, namely light and heavy. For instance, Iran produces Iran Light and Iran Heavy crude oil.
The crude or black gold price forecast is the most effective way of making a profit from crude oil through the binary options because this product price often changes (this means prices often go up and down).
How to perform a crude oil market analysis
Transparent pricing enables you to earn on crude oil. If you understand what can have an impact on crude oil quotes, you can predict precisely the future price and make a right deal. So, when you carry out a fundamental analysis of the crude oil market, you need to consider a great number of indicators described below.
Firstly, the price of the crude oil directly depends on the seasonal price of gasoline and distillates which, in its turn, lean on demand.
The peak of demand falls on winter and summer seasons.
Summer is a season of vacations and, hence, of a growing demand for gasoline.
Winter generates better demand for distillates obtained from crude oil and used for home heating. Increasing demand for these products make the crude price rise.
Organization of Petroleum Exporting Countries (OPEC) has a significant impact on the crude oil price. You need to take this into consideration when you do the fundamental analysis. The impacting factor is the organization’s decision on allowable crude oil production.
- If the allowable production is decreased, the prices go up due to imbalance between demand and supply.
- If the organization takes a decision to increase allowable production, the crude oil price falls because the volumes supplied to the market increase.
Where there is demand, there will be supply
The economy of the countries being major crude oil consumers has a significant impact on the price fluctuations as well. Their failure to make a purchase causes the price decrease.
You can anticipate the decrease in purchased volumes if you track the debt problems of the countries, their microeconomic performance, military operations, revolutions, and other economic and political factors.
One of the basic fundamental objects is countries holding the largest crude oil deposits in the world. They are as follows:
- – Iran
- – Iraq
- – Russia
- – Venezuela
- – Kuwait
- – Saudi Arabia
The basic importers purchases of which you need to track are the Unites States, Japan, Canada, and Europe Union.
The larger the volume these countries buy, the quicker the crude oil price grows.
If demand for crude falls, the price drops as well. They are in the direct ratio.
Follow the corporate news as the companies specializing in crude production have a dramatic impact on its price. You should mark the senior staff speeches, performance reports, the produced volume reports as important in the economic calendar.
As the brokers chiefly offer to invest in binary options and make a profit from the light sweet crude, you need to concentrate on the U.S. reports and data. Needless to say, the price of the WTI is determined by the events around the globe, therefore you have to consider how military conflicts in the crude oil producing countries can affect the United States and try to predict the price fluctuations.
In addition to that, you need to understand that there are different crude oil grades and take into account the WTI price alone.
The North American news reports often refer to the price of crude oil, so don’t confuse the WTI and North Sea Brent grades.
WTI and Brent are almost the same, however, their prices differ because of the transportation from Cushing, Oklahoma, to the Gulf of Mexico where the crude oil can be refined or shipped to other countries substituting there expensive Brent crude.
I recommend that you browse http://www.ogj.com/ . This is the largest website on the crude oil where you can find the latest world news and quotes. Also, you can thoroughly analyze the crude oil market there.
How to make a profit from crude oil?
To earn on crude oil, I use the service of AnyOption. To make a deal, you need to do the following:
- Select an underlying security – Crude oil.
- Set the time of expiration.
- Set the amount you invest.
- Select your forecast that is to work out during the period you set.
For instance, you set the binary option to expire at 12:00 midday, and now it’s 11:35 p.m., this means that your binary option is valid during 25 minutes. You need to predict how the price will behave or, in other words, go up or down during these 25 minutes.
To raise money on crude oil is not so difficult at it may seem. It’s important to follow the news and economic calendar. Invest only if there are new events or changes on the crude oil market.
If the crude oil market stagnates, you can invest in other assets with the AnyOption brokerage company, for instance, in Daimler AG stock, NASDAQ index, gas… Don’t miss the chance of making a 70% profit in just an hour!