Oil trading has long been a stable part of the commodities market. Is it the right thing for you, though? We can help you determine whether oil trades can bring you benefits as part of your portfolio or not.
Although it’s called ‘Oil Trading’, oil trading is far more than you might think. Just consider the fact that crude oil is the base of everything that has a combustion engine - petrol, oil, diesel, even paraffin demand, all has an impact on this market. Although it may seem intimidating at first, it's quite the contrary. There are very good available indicators that will show you how oil trends usually fluctuate.
We at MarketsPremium believe you can benefit a lot from oil trading as part of your portfolio. These include:
•Cars have always been in - and we’ve yet to replace their heavy energy demands.
•Oil is easy to produce and refine, we continue to produce oil products, making this market strong. Alternative energy sources haven't reached that level yet.
•You can benefit from leverage as fluctuating source production and finding new ones imply constantly changing prices.
It is actually very simple to understand how to use leverage for oil trades to your advantage. You can follow some key principles that many traders swear by: First, know your two benchmarks. Brent Crude is a sweet, low Sulphur and light oil. It mostly comes from the European North Sea. WTI is also sweet and light, but it's made in the US. Both prices are typically reported.
Don’t discount politics- typically you need to consider Europe, Russia, the US, and the OPEC countries (the Middle East and South America) and China is a rising player. Consider global and domestic production if you’re in an oil producing country. Have in mind that drilling for oil is expensive and that’s why people keep trying to develop new techniques. In the end, demand is what is important for the production. These are the main factors regarding oil prices and they can help you a lot when trading!
Try to stay updated in order to know how these different factors are playing off of each other. The global demand could be high and the domestic - low. OPEC could be withholding supplies. Fracking sites could be opening. This affects the oil market. Moreover, if you look into the past market figures (while never indicative of future performance) you will be able to understand the basics of the oil market and its specificities. Oil trading doesn’t have be hard, especially if you have MarketsPremium’s platform.
Why Natural Gas Commodities are at the center of attention
Trade in natural gas is quite underestimated. As for the supply of more normalized fossil fuels continue to rise, exploration of the semi-sustainable natural gas front is a priority goal for many countries - with a concomitant market movement to match.
Here are some interesting facts about the market for natural gas trading
84% of the world’s natural gas reserves are held by 15 countries, mostly Middle Eastern, although, clean burning and efficient, natural gas can also be supplied from within the US. Progress of modern technology significantly increases yields, although traditional fossil fuels have a larger share. It can be exported as Liquefied petroleum gas, but is difficult to store, meaning demand is almost always high. The pipelines are laid difficult, especially in the oceans, so the technology for liquefied petroleum gas, which allows export provoke interesting movement in the market.It is possible that this may have different effects on the market and lead to large fluctuations. We believe that with a good survey, we can take advantage of the changing situation to make bigger profits.At MarketsPremium, we believe that trading in natural gas is a good market in the future.
In other words, its low prices create a favorable environment, a stable economic position and market demand is growing. The products of natural gas became extremely popular in the market, and natural gas trade can bring impressive profits to those who trade at the right time.
Of course, as with all goods there are no guaranteed returns, but natural gas is a market that is closely monitored by the economies of the Green Zone. They also produce interesting by-products because of the need to purification and removal chemical compounds. These products can also be sold in their own right - such as ethanol - for refining with other uses, which in turn contributes to the economy.
In the past, it was difficult to export natural gas he pipes cannot easily be laid. As the cost of processing liquefied natural gas (LNG) declined significantly in recent years, the opportunities for lucrative export market started observed.
Qatar has a leading position in the world in terms of trade in natural gas with
1180 trillion cubic feet of gas - about 20% of the world's supply. However, tense relations between the
United States and the Middle East do not contribute much to promoting a safe
export environment. All these factors
have an impact on daily price movements of natural gas, as they affect the
economy of countries - producers, as well as exports and imports.
All of these factors will have a daily effect on the natural gas price movement, as they influence the economy of manufacturing countries, and on export and import.
On the other hand, improved technology makes gas extraction much easier, which over time will lead to increased demand. Similarly, problems arise in terms of local production relative to international production in order to achieve a balance within the market requirements.
Is natural gas trading and the natural gas market suitable for you?We at MarketsPremium believe that this market has a lot of profit opportunities.
Coffee trade remains stable in almost all market conditions, although many people are still unaware of the enormous potential of this product. We are convinced that the trader should combine a wide variety of currencies and commodities to maintain a well-balanced portfolio. That way you don't put all your eggs in one basket.
Coffee market is mainly influenced by the supply coming from Brazil, Vietnam, Indonesia and Colombia, as Brazil has a leading role.In practice, Brazil produces twice as much as its biggest competitor -Vietnam. However, the lower price of Vietnamese coffee beans creates an interesting competition within this market.
What are the factors that affect the prices of commodity trading with coffee?
•It is considered that the South American Arabica coffee has a much higher quality, dictating a higher price. This, however, creates an interesting climate in the coffee trading area, leave the Arabica exporting countries open to competition from those companies producing the cheaper Robusta bean.
•Coffee commodity trading is also being strongly influenced by the growth of the ‘fair trade’ coffee beans. Coffee trading prices are also affected by the fair price given to farmers prior to harvest, which creates another competitive environment with negotiating features outside the trading market that must also be taken into account.
•Coffee is being subjected to medical research due to its effects on diseases such as Alzheimer's, liver cirrhosis, gout, etc. This could mean, in the case of substantial scientific achievements, an interesting stimulation of the coffee bean market.
•Coffee is the key agricultural crop in many countries, with the revenues of some of the world's poorest countries heavily dependent on coffee trading. This does lead to cyclic pricing, due to the seasonal nature of the commodity and weather conditions during the harvest period and their impact on farmers. Coffee trade is also highly seasonal.
Coffee trade is a stable market with great demand. The rise of the countries producing Robusta has also created an interesting market where the lure brought about by the ratio between quality and cost creates fluctuations. Also, the increased demand for coffee produced according to ethical standards creates a superb market niche. All this makes coffee a commodity that can hardly be predicted, but can bring significant income.In an environment where demand is beginning to outstrip easy delivery and 'green' consumption increases, people are willing to pay premiums for commodities that run counter to past economic performance.Ultimately, coffee trading is in an intriguing state of constant change and by applying the right strategies, traders can increase their profits.
As you can see, coffee trade is an unconventional but interesting commodity that has great potential for beginners as well as experienced marketers. It is important to remember that a diverse portfolio is the intelligent solution for every trader.
Sugar Trading, a sweet investment
When discussing the financial markets, sugar trading is probably not the first commodity you can think of. However, the sugar market actually offers an incredible profit potential.The following will introduce you to the foundations of the sugar market.
The ‘sugar market’ comprises fructose, lactose and sucrose- i.e. edible carbohydrates. Sugar beet is the root product from mild climates like the UK, where sugar cane comes from tropical climates. These juices are then processed into the end products. Sugar commodities are traded the same as most other commodities, with its own ticker and symbol.
The Sugar market sees a constant steady growth, so sugar trading is essential for a diversified portfolio. While there is some fluctuation in the market, as with all commodities, demand for sugar is fairly high and looks set to keep growing steadily over time. In a market that demands junk food, sugary drinks and chocolate on a regular basis, it is likely to expand even more over time.
The forces of supply and demand influence all commodities. Weather and disease are the primary reasons that a sugar crop may be poor in one year and prosperous in another. Climate, natural disasters, soil quality, drought conditions and insect patterns will all impact supply as well.
Sugar has some industrial uses, in particular the growing production of ethanol, but by far the largest market for sugar products is the edible food arena. Keeping track of developments in the food industry in large consumer countries like the US can be an effective way to plot the market.
Ethanol is an interesting arena for sugar trading. Brazil is currently the largest producer of ethanol, and there is a strong focus on this product as a potential alternative to fossil fuels (ethanol is fully sustainable). If you are looking to speculate on the ‘green’ markets, this may be the focus for you.
Sugar trading has interesting futures options, and can make an interesting trading commodity in itself. There is even an ETF tracker for sugar. With the rise of sustainable fuels and its uses in food, it is an industry that is set to remain in steady growth over time, which is why we think that including sugar commodities in your portfolio is a great idea.