Brent Oil - A Report Brought to You by Q8 Trade
Brent crude is the standard type for determining the price of two-thirds of the world’s crude oil production. It is a mixture of crude oil that exceeds 15 oil fields in the North Sea. Brent crude is suitable for the production of gasoline and medium distillations to be classified as a sweet light oil, and based on the differences between it and other materials it is generally sold at a higher price than the OPEC basket “At about a dollar a barrel, at a lower price N WTI about $ also.
Although most European countries consume most of the Brent crude produced, it is sometimes exported to the United States and a number of African countries, depending on the price and shipping costs.
Brent crude is named after Shell, which discovered the oil field after it verified it. It is located in the North Sea. Shell named the oil fields after the names of birds. The North Sea, Brent crude is often refined in northwestern Europe, and Brent refers to a mixture of four types of crude oils Brent, Fortez, Osberg and Ecovisk, collectively called Brent Crude.
Features of Brent Crude
- Brent crude is characterized by selling at a price more than selling the basket of oil “OPEC” by nearly a dollar per barrel.
- Brent crude oil is characterized by being light and sweet due to its specific weight of 38 degrees and its low sulfur content of 0.37 percent. Its production accounts for nearly 40 percent of global production and 60 percent of its production. Heavy oil.
- Brent crude production covers all European countries, and is sometimes exported to the United States and some African countries.
- Brent crude is one of the finest types of oil in the world, which number 160 species in various countries of the world, and is one of the preferred types of oil to produce fuel and gasoline.
Difference between Brent and US crude:
Oil is one of the most important commodities traded in the world, due to several reasons, the most important of which is that it is evaluated for the general performance of the economy of the countries and also for the national product, as it is affected by the relations and political movements that are between countries, and in general are two basic types of oil It is traded around the world, which is Brent crude or the so-called global measurement crude, and US crude or what is called West Texas Intermediate crude, and there are some differences between the crude, including:
- Brent crude is extracted from the North Sea oil fields and consists of 15 varieties produced in the oil fields with a mixture of four crude oils – Brent, Fortez, Osberg and Ecovisk and collectively known as “Brent Crude”. U.S. crude is extracted from the oil fields in the United States, and is mainly extracted from Texas, Louisiana and North Dakota, and transported through a pipeline to Cushing, and delivered in Oklahoma, West Texas crude is certified in the Western Hemisphere.
- Chemical composition of Brent crude and West Texas crude where the proportion of sulfur in the crude, and this ratio has a significant impact on the price of different types of oil.
US crude contains 0.24 percent sulfur, while Brent sulfur is 0.37 percent.
- At present, US crude is the benchmark for oil prices in the United States, and the rest of the world – and nearly two-thirds of all oil contracts traded – are priced on Brent basis, which is why Brent crude is a world standard.
- Oil trading platforms vary so that the country of residence. US crude futures are traded through the New York Mercantile Exchange (NYMEX), which is owned by the Chicago Mercantile Exchange (CME), and in Cushing, both of them are delivered to US crude futures. Brent meets pipelines, easy-to-access storage facilities, and Brent crude futures are traded through the London-based ICE.
- Global crude oil futures are traded according to the schedule of oil trading hours from Sunday to Friday from 7:00 am to 5:00 pm Chicago time, while WTI futures trading hours are Sunday through Friday from 5:00 pm Morning to 4:00 pm Chicago time with a daily break from 4:00 pm Chicago time for 60 minutes.
Why is Brent always higher than US crude?
In the mid-1980s, global benchmark and US crude had roughly the same price, and sometimes the price of US crude was higher than world benchmark.
Since the last three months of 2010, Brent crude has continued to trade on the London-based International Petroleum Exchange, now called ICE, higher than the benchmark US West Texas Intermediate (WTI) crude, and the difference between the two crude oil finally reached $ 27 a barrel. His level since that period.
The price depends primarily on the cost of production and distribution, and it is clear that Brent’s superiority over WTI is due to the nature of the Brent Open Sea by sea and also its geographical location, which is why it is highly correlated with the global trading markets, in addition to the fundamental and strategic changes in nature. Oil markets.
One of the reasons why Brent crude is higher and US crude is not accessible to international markets is that the delivery point is located in an isolated place in Oklahoma, where the delivery point for Nymex crude contracts is located in the storage center in Cushing. Located along the US Gulf Coast.
Oil market speculators play a role in determining Brent crude’s superiority, as funds of many investment funds, portfolios, and hedge funds have also been transferred to Brent crude futures, as investors see Brent as the best measure of economic growth in the world.
How is the price of Brent crude determined?
The price of Brent crude differs from OPEC crude and US crude, which is used by commodity markets to determine the majority of oil imports in the world, and most of the quantity produced is consumed in Europe where it is produced, and exports small quantities to the United States and a number of African countries.
Since 2005, the Brent Crude Index has been transferred to the international electronic trading market, where the price is calculated in green currency and each point is equal to $ 10.
Factors affecting the rise or fall of Brent crude
Because Brent has a significant position in the crude oil market, global benchmark prices are affected by a number of factors, including:
Geopolitical and economic factors:
Economic areas, mainly oil production and export, would have a far-reaching impact on the prices of all types of petroleum products.
Brent crude prices are affected by OPEC supply, as a decline in the amount of production that is targeted for OPEC may cause the rise of global crude oil prices.
It has long been recognized that environmental risks have an impact on oil prices, as they change the supply dynamics of commodities.
Stages of the rise and fall of Brent crude:
Its all-time record levels:
Year 1986/2008: Maximum: 07/07/2008 amounted to 147.27 – Minimum: 31/03/1986 amounted to 9.75.
Year 2011/2016: Maximum: on 28/08/2013 was 112.21 – Minimum: on 11/02/2016 was 26.08.
2016/2017: Max: 03/03/2017 reached 55.21 – Min: 11/02/2016 reached 26.08.
What are the advantages of Brent CFD trading?
CFD Trading is the preferred trading method for the new beginners in trading, and they have no experience in trading operations. Trading currencies and CFDs is an indefinite contract, as the expiry of the contract is determined by the investor himself, from which he can gain or know his loss.
Daily trading is done by buying and selling on different assets on the same trading day.This way allows the trader to make a lot of trades in one day.There are several ways of day trading where leverage can be used to open trades that are large. The use of CFDs in daily trading in case of any changes, even small, to the value of the asset on the same trading day.
Oil is one of the most heavily traded commodities around the clock, and whether it is trading on Brent (global benchmark) or US oil (West Texas Intermediate), the price of oil is valued in US dollars.
Thus, the US dollar exchange rate becomes a key factor when trading Brent CFDs, and should be observed and monitored carefully from the rise and fall in the price.
As for trading through CFDs, it gives the possibility of trading the change in prices, which occurs in the futures and options, and this is done without the purchase or sale of the contracts themselves, there becomes a provider of leverage, instead of trading in commodity exchanges, and this is due to a lot of Benefits for oil traders, such as trading on spot prices of standard types of oil, also the possibility of buying and selling in a wide range of oil markets, in the same platform chosen.
There are many ways in which they can Brent crude investment appropriately, including ETFs , a type of traded funds in the stock market , futures: ETFs as investors looking to access optimal utilization of Brent, where they are during the trading of products in the stock market, featuring crude With low costs and complete transparency, investors should be aware of what is happening to Brent crude price changes but can gain gains through a futures strategy.
Investors who want to take advantage of Brent crude prices also have the opportunity to choose to use the futures system. Brent ICE indicators.
Example of Brent Crude Trading:
You can buy 2 lots of Brent crude for $ 52.20, which is equivalent to $ 200 per move in the price of $ 1, and after one week has passed, oil traded in the market at $ 49.50, at this time decide Close your position, and your earnings will be calculated as follows (52.350 – 49.50) x $ 200 = $ 600.
Oil is a major commodity and strategic in the world, and there are its price and variables such as (Brent crude and West Texas crude) They are in a state of constant volatility depends on supply and demand, economic and geopolitical turmoil, as well as the pricing system in the US currency, and we often find some hedge funds buy oil as a means To hedge against any inflation that may occur, others invest in the oil market based on what they see and expect to put the energy market in the future, and when trading CFDs for Brent crude you can buy if you expect the price may rise, or sell if you see that the price may fall, This gives you the opportunity to be right It gains gains in both directions.
Brent crude trading advantages through CFDs with Q8 Trade
- CFDs allow the trader to benefit and profit from the change in prices, whether up or down.
- CFDs can be traded using leverage, which allows opening large positions with relatively small capital.
- You can trade anytime and anywhere by using your advanced platforms.
- In CFD trading, you do not need to own the products you invest in.
Why should you trade in Brent with Q8 Trade?
Q8 Trade offers the possibility of trading Brent crude through CFDs, as this ensures access to gains even if prices fall.
With Q8 Trade, you can use leverage to increase the amount you trade.
Q8 Trade offers the opportunity to trade during Brent crude trading without paying any fees, through CFDs, as you do not own Brent Crude.
Q8 Trade provides many tools that you can use during Brent crude such as: prices, real time, historical charts, all the news related to Brent crude which can have a big impact on its performance, live charts, fundamental and other technical analysis.