Continued Stock Decline Pushes Oil Down From Three-Year High
Investors this week are likely looking for a way to offset losses related to stock declines since Friday, Jan. 2, 2018. With a 2 percent loss on Friday, some analysts hoped for an upturn on Monday. They were disappointed, however, as the market continued downward in a second day of price losses and sell-offs.
Most people who trade oil futures know that Brent crude serves as the international benchmark for oil prices. The price for Brent crude has turned bearish, contracting from recent gains at the end of January. When London markets hid mid-day on Tuesday, Brent crude futures were trading at $66.96 a barrel, down more than three dollars from its late January high. That doesn’t spell doom for oil trading, however, as the price still represents a gain of one percent for 2018 so far.
Stock Decline Has Traders Concerned
Many of the decisions made by short-term traders are based on a combination of research, historical market behavior and gut instinct. There is some emotional aspect that compels people to sell when prices are dropping, despite knowing that doing so could mean taking a loss.
On Monday, Feb. 5, 2018, the Dow Jones Industrial Average took a downturn that is historically the biggest single-day loss for the popular index. With a loss of almost 1,600 points in intraday trading, which is a total of more than four percent of its value, the Dow Jones has many investors nervous, leaving analysts concerned about additional corrections or contractions in trading on Tuesday.
Thankfully, while oil seems to be backing off of previously high prices, it has remained more stable than other investments in this surprise dip in the market. That is due, in part, to the constant demand for oil- and petroleum-based products by companies and governments around the world.
Oil Traders Can Profit off of Market Instability
While oil prices and the stock market tend to trend in the same manner (when stocks go up or down, so does oil), oil futures are more likely to fluctuate than simply decline steeply. Savvy traders using an online Forex platform can turn those price shifts into short-term profit.
How to Trade $10,000 of Oil with a Few Hundred Dollars
With an online forex trading platform you have the ability to trade with leverage of up to 100:1 buying power. That means that you could control an oil trading position of 1000 barrels of crude oil with only a couple hundred dollars. The price of energy changes daily, and you can take advantage of these market price fluctuations. With a live account your capital is at risk. Start today by opening a practice demo account.
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