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How to Keep Track With Changes in Crude Oil Prices

Back to investing platform, especially to futures market, as you see, we will narrow the topic at crude oil futures. Joining into this trading floor, traders or investors need to keep track with changes both commodity futures prices in general and crude oil prices in particular, since markets are interactive to each other. However, because of the limited time, we will first of all check out the oil market. And here, "How to Keep Track With Changes in Crude Oil Prices."

You may know that crude oil futures are among the most popular and widely watched futures markets. There isn't a day without the mention of crude oil price on the television, in newspapers or magazines. Don't let you go behind! We will learn how to keep track with changes in crude oil prices right away. As we are solving the mathematical problem, we need to go step by step. First of all, find out what make the crude oil price change! Then we will surely know what should we do to solve our problem. Now, let's check out what are fundamentals causing changes in oil prices!

Supply and Demand
Domestic demand and global demand both affect on crude oil price. Over the last decade, emerging markets like China and India have increased demand for crude oil and so this led many speculators to suggest that demand would outpace supply. On the domestic side, the regular reports from the EIA on refining activity and crude oil supply have direct impact on crude oil price and also crude oil futures price volatility. Released weekly, EIA reports and API reports are often key fundamental influences on crude oil futures markets.

Weather
That sounds strange that weather can affect oil price, but it will. Storms in the Gulf region of the United States as well as the North Sea can halt production of crude oil both on drilling platforms as well as refineries which may be shut down anticipating the arrival of a bad storm. Events like Hurricane Katrina stand as strong examples of how weather may have a direct impact on crude oil price.

OPEC Output

OPEC as all of us know that is The Organization of the Petroleum Exporting Countries. From its name, we all can be sure that its activities wil have strong effect on oil market. Opec production levels and promises for production can also add volatility to crude oil prices. Even a scheduled OPEC meeting and speculation about increases or cuts to oil production can impact crude oil futures markets.

Refinery Repairs or Issues
I think you can predict this fundamental already. Yes, when pipelines or refineries are shutdown for any reason, this can disrupt supply and cause crude oil prices to fluctuate.

Geo-Political Issues

Tensions in oil producing regions or near pipelines or refineries can also cause changes in crude oil prices as investors weigh the possibility of supply interruptions. Pipeline attacks or oil tanker hijackings are some past examples. Political tensions and war in the Middle East also influenced crude oil price in the past.

These are situations you will want to be aware of when you want to keep track with the changes in oil market as they can impact the prices and increase volatility. Crude oil futures trading can be incredibly risky even without events such as wars or hurricanes to increase volatility.

We have just finished proving our mathematical problem. Put an eye on the above fundamentals, you will be not only able to control your investment in energy market, but also in the commodity futures markets. The daily futures price reports on oil prices, gas prices, gold prices, etc. can support you in this case. People said trading in futures commodity involves a substantial degree of a risk of loss and is not suitable for all investors. But, you will said differently. It's up to how you do.


Disclosure: No positions