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Best Brent Crude Oil Trading Brokers

Also known as Brent blend, Brent crude oil is primarily drilled from the oilfields in the North Sea and is the most traded of the three benchmarks. Each region’s oil is slightly different from the oil, which is found in the other underground reserves around the world, and because of the varying ease of transportation and their use in different industries, their value also differs.

The three main benchmarks that are used as a reference for the price of crude oil are Brent oil, WTI oil, and Dubai oil. Interestingly, Brent oil covers well over 60% of all oil contracts, and it is classified as light and sweet, which makes it suitable for the production of diesel and gasoline. Unlike WTI oil which is mainly extracted from land wells, Brent oil is easier to ship as it is already at sea.

Brent crude is preferred by those who trade contracts, futures, and derivatives, and it is hardly a coincidence that it makes up such a considerable share of the crude oil that is traded internationally. In spite of the fact that Brent oil has been the most prominent of the three benchmarks, its price has seen some major peaks and troughs. The growing output of WTI oil and the depleting reserves in the North Sea might lead to a change in its position.

How Brent Oil Trading Works for Traders and Brokers

WTI Oil TradingBrent crude is one of the fundamental sources of energy for the world’s economy, and oil products are integrated into almost all aspects of our lives. The crude oil market is all about investors’ expectations about the direction in which the supply and demand of the commodity will change, and consumer and investor sentiment have a major impact on its price.

For beginners, oil trading involves buying and selling different types of oil, Brent crude included, or oil-related assets for the purpose of making a profit. The high market volatility is what makes it so well-liked by traders as, if they seize the right opportunities, the potential profit might be rather eye-catching.

How to Trade Brent Crude Oil

  • Oil CFDs – the value of these contracts is determined by multiple factors, and before the contracts reach maturity, traders can go long and short of their prices. Unlike Brent oil futures and options, CFDs do not have an expiry date, which is to say that traders can keep a position open as long as they please. What is worth noting, however, is that overnight financing fees are applied to CFDs. Another thing to keep in mind about Brent oil CFDs is that they are traded with leverage, but even though it can result in larger profits, the risk will also be magnified.
  • Oil futures – these are standardized agreements according to which the commodity will be exchanged at a future date at a preset price. When the point of expiry of the contract comes, it can be settled or rolled over to another closing date. The contract settlement can happen either physically or in cash. It is important to note that futures are used to price the other oil markets, which is to say that when buying the commodity using the other means, you will still get exposure to Brent oil futures.
  • Oil ETFs – exchange-traded funds are one of the most preferred financial instruments traders rely on when they want to get exposure to the oil market. These are baskets of commodities, stocks, or other assets that pool the money of all investors. Then, a benchmark is employed in order to measure up their performance. In most cases, these are based on an index or industry and track commodities, currencies, shares, or bonds, among others.
  • Oil spots – in contrast to futures, spot prices represent the current cost of selling or buying the commodity and not how much this commodity is going to cost at the time when the futures contract expires. These transactions are short-term ones and are settled almost directly. Unlike oil futures, with spot prices, traders should not roll over their positions as they are non-expiring, which is to say that they will be continuously offered. As for the way spot prices are determined, they are normally based upon the two futures contracts with the nearest termination date.
  • Oil options – these contracts give the contract holders the opportunity to purchase a commodity, which in our case is Brent oil, at a predetermined price and at a later date. Even though oil options are very similar to futures, with options, there is no commitment to purchase the commodity. Thus, before the option expires, traders can exercise it or attempt to find a more advantageous price on the open market.
  • Oil stocks – getting exposure to Brent oil markets can also be done through relevant stocks. Thus, traders can focus on companies that transport and store oil, such that refine it into a finished product, or companies that explore and produce the energy sources.

Reasons for Brent Oil Price Fluctuations

Reasons for Brent Oil Price FluctuationsBrent oil’s price continues to zigzag mainly because of geopolitical and economic factors. Its liquidity is always high, and traders should also keep in mind that oil prices are highly volatile.

Thus, its price will go down whenever individuals’ spending capacity and the demand for energy is limited, which happens when the economy slumps. Its price is also highly susceptible to geopolitical events, and such events also send shake waves through the market. Global health crisis, political shifts, and weather patterns are only some of the shock factors that can affect the market.

Its price might also be driven by shortfalls in supply, and concerns about the disrupted supply chains lifted crude prices at the end of 2021. Alternative fuel developments, shipping availability, and freights, together with the constantly growing world population, can also affect the price.

The role of OPEC should also be considered, and as traders might already know, the organization has a sway over oil supplies, production rates, and global oil prices.

Brent Oil Trading Brokers

choosing a brokerBrent crude is the flagship of all oils, and it comes as no surprise that the brokers that allow trading it are not far and few between. Selecting the best broker might be a bit hard doing, especially considering how vast the choice of Brent oil trading platforms is. Before they put their trust in one of the platforms, traders should make sure that the broker will let them play other markets as well. Additionally, they should check whether the broker offers the right account type for them and what trading tools and resources they can make use of. The prices per trade, the accepted finding and withdrawal methods, and the available trading platforms are also among the things they should verify that are featured.

Related Topics


1. Is Brent oil the best commodity to trade?

Trading Brent oil and energies in general, opens lots of opportunities for traders, and the market’s high liquidity and volatility is what makes the market such a well-chosen option. Traders can use a derivative strategy in order to make the most out of the market’s volatility. Using the long straddle strategy is what traders might prefer when they are looking to capitalize on large price movements.

2. How can I trade Brent oil?

There are multiple ways in which traders can approach the commodities market, and they can either speculate on its price or sell or buy the underlying asset. Traders can get exposure to Brent oil directly through ETFs and futures or indirectly through equities. CFDs give traders easy access to the market and offer high leverage, excellent liquidity, and low fees. In order for traders to pick the right way to trade Brent oil, they should gain a good understanding of the ways economic data is correlated to the energy market.

3. Why Brent oil prices change?

Oil prices are highly volatile, and there is a wide range of factors that might lead to fluctuations in costs. Brent oil prices are heavily influenced by global economic growth, alternative fuel developments, seasonal demand, natural disasters, and shipping availability, among others.

4. What is the difference between Brent oil and WTI oil?

These are the two main oil markets, and WTI oil is primarily extracted from Texas, while Brent oil is mainly found in the North Sea. Brent oil has low sulfur content and low density, and for this reason, is a high-quality sweet blend of oil. WTI oil contains less sulfur, which is the reason why it is lighter and sweetener in comparison with Brent oil.

5. Is it better to trade Brent or WTI oil?

Whether WTI or Brent oil is a better investment depends only on traders’ personal preferences and their portfolios. Thus, the best thing they can do in order to make an informed decision about which option is better is carry out an in-depth research of both commodities.