Oil, crude oil, petroleum

Oil

Crude oil (or petroleum) is one of the most traded commodities. It is a fossil fuel, and one of the world's most important natural resources. Derivatives of oil include gasoline (petrol), kerosene, heating oil, various gases, lubricants and waxes.

Discuss oil and other commodities:

There are four major price benchmarks which help facilitate the trading of oil – the Brent Crude, Dubai Crude, West Texas Intermediate and OPEC Reference Basket.

Oil is a finite, non-renewable energy resource, and its availability is a source of great economic and political agitation. Large oil producing countries such as Saudi Arabia, Russia, Iran, Canada or Norway draw a significant share of their economic power from exporting oil.

Oil and forex trading

Due to its volume and importance, oil trading can have a significant impact on the price movement of currencies. Some currencies, such as the Canadian dollar (CAD) are even referred to as "petrocurrencies".

For example, the United States buys oil from neighbouring Canada. To do this, buyers need to convert US dollar (USD) into CAD. This increases demand of the CAD and thus influences the currency pair USD/CAD.

Read more on the relation of commodity prices and currency markets:

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  • Forecast for 22nd January 2013

    March Brent Crude has made it above 112.00 breaking the 9 month down trend as we look for the next target of 112.47. A push through here then takes us to 112.90 on the way to this month’s high at 113.29.

    112.00/111.85 is support and we could hold above here today but a break lower then risks a drift lower to 111.40/35. Look for a low for the day if this level is seen to exit any shorts, buy in to small longs and average in to more longs down to the 100 day moving average and Fibonacci support at 110.92.
  • Forecast for 22nd January 2013

    WTI Crude Oil tested 95.12/94.95 which acted as good support as predicted. We are holding below last week’s high of 96.04 being over bought on daily and short term charts but we are in a solid two month uptrend. A retest of tough resistance at 96.04/17 is possible today but we need to break 95.60/65 first. Go with a break through 96.25 looking for the next target at 96.92. Here we exit all longs and try shorts with a stop above 97.30.

    We could come under pressure today to ease the over bought oscillators. Another test of 95.12/94.95 support is therefore possible and we cannot rule out a break below here looking for the one month trend line and 2 week 38.2% Fibonacci support at 94.40/30. Exit shorts here and buy in to longs with a stop and reverse in to shorts below 94.00. We then look to cover shorts and buy in to longs again down to excellent support at 93.48.

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