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Best WTI Crude Oil Trading Brokers

Known also as Texas light sweet or West Texas Intermediate (WTI), US crude oil is without a doubt among the most valuable commodities to trade. It is sourced primarily from the Permian Basin in Texas and is then refined in the Gulf of Mexico and the Midwest.

Along with Dubai Crude and Brent, WTI is one of the benchmarks when it comes to oil pricing, which is to say that buyers and sellers of crude oil use its price as a reference. Additionally, it is the primary commodity of the New York Mercantile Exchange which is the world’s largest physical commodity futures exchange.

Because of supply and demand changes, the price of the resource can see sharp movements, which is exactly the reason why WTI oil is now increasingly popular among traders. Owing to its unique standing in the world’s political and economic systems, while trading WTI oil traders will almost always stand the chance to get a profit, regardless of the market conditions. Yet, if you do not clearly understand the characteristics of the market or its pitfalls, you effectively decrease your chances of getting the coveted profit.

How WTI Oil Trading Works for Traders and Brokers

WTI Oil TradingWTI is a high-quality oil that is easily refined and is preferred by traders because of the strong trends that are observed over the past few years. Thanks to them, long-term timing strategies and short-term swing trades can produce some handsome returns.

Learning the unique characteristics of WTI oil trading is a must in order to ensure that traders will be able to make the most out of the large swings in its price. Before you start playing the oil market, you should take your time to learn more about the different ways in which WTI oil trading is possible. It is up to traders to decide whether they prefer to go for exchange-traded products like ETF and ETN, options, futures, or spot oil. Each of these options goes with a certain degree of risk, and traders should keep in mind that they will deal with one of the most volatile commodities.

  1. Oil spots – if you have deep pockets and facilities where you can keep oil barrels, then buying WTI oil on the crude market is what you should consider. With spot oil markets, the settlement takes place almost instantly, which is to say that the transactions are short-term ones, and they represent the price of a barrel you would have bought or sold at a specific time. Thus, spot prices indicate how much it is worth right now. An important thing to keep in mind is that these commodity markets have no expiry date, meaning that traders are not required to roll positions over.
  2. Oil futures – futures prices will go to show how much oil will cost when the contract’s expiration date comes. When they go for oil futures, traders give their consent that a preset amount of oil will be exchanged at a specific date. It is important to note that there are futures contracts that require the transfer of the commodity at a pre-set delivery point. Futures contracts are so preferred by traders because they do not need to actually get a delivery of the commodity. Even though traders are still required to fulfill the contract, this is achieved through a cash settlement. Companies, on the other hand, use futures when they are looking to make the most out of an advantageous price of the commodity.
  3. Oil options – oil options are yet another way to buy oil, and much like futures, you will have the freedom to buy or sell the commodity on a preset date and at a set price. Options are further divided into two sub-categories, and they can be puts or calls. Traders will buy a put when they think the WTI oil price will fall and go for a call when they think the price will increase.
  4. ETFs – the popularity of exchange-traded funds has skyrocketed in recent years, and thanks to them, traders will get exposure to the market by keeping tabs on its price as a commodity.
  5. WTI Oil CFDs – trading on the prices of oil futures, options contracts, or oil’s spot prices can also be done through contracts for difference or CFDs. This time, traders will not be required to take delivery of the asset, and it is up to them to decide if they want to roll over their futures positions when the contract matures. With such contracts, traders will have the opportunity to leverage their position, meaning that they will be allowed to open it for just a fraction of its actual cost. Yet, leverage can be a double-edged sword, and although it can make for larger profits, it also makes for elevated risk.

Why WTI Oil Price Increases and Decreases

Price IncreasesThe worldwide output and global economic prosperity are the two main factors that have an impact on the supply and demand of oil. Thus, during periods when there is a rise in demand and decline in production, traders will bid the price higher and in reverse, traders will start selling oil markets during periods of oversupply and sluggish demand.

Additionally, during periods when the economy thrives, an increase in the demand will also be observed as industries like pharmaceuticals, manufacturing, energy, and transport will need greater supplies. Thus, the price of WTI oil will go up if the demand exceeds supply. The WTI oil price will decrease during periods of economic decline.

The push for alternative energy resources is yet another factor that can move the price of the commodity. Since more and more companies turn to resources like hydroelectric, wind, and solar, the demand for oil might considerably decrease. The influence of OPEC and oil storage should also be considered when discussing the WTI oil price movements.

WTI Oil Trading Brokers

choosing a brokerThere are lots of things to be considered while being on the lookout for an online WTI oil trading brokerage, and the regulation the broker falls under is what you should look into in the first place. How long it takes for deposits and withdrawals to be processed, along with the working hours and contact venues of the customer support department, are also among the things to look into. The broker’s presence on the online scene, its reputation, the pricing, and the trading terms are without a doubt among the features that should tip the scale against or in favor of the broker.

Related Topics


1. What are the ways to trade WTI oil?

Purchasing WTI oil barrels and then hoping that you will have the chance to sell them at a higher price is one of the ways to invest in the commodity. This is not such a practical way of trading oil because it requires significant insurance, while the barrels are difficult to store. Investing in the stocks of companies that are involved in oil exploration, production, and refinement is one more way to go when you want to get exposure to the market.Trading oil futures, investing in oil ETFs, and trading CFDs are the other options traders have when they want to get exposure to the market. WTI oil CFDs are so well-preferred because, thanks to this tool, you can trade price changes without investing in the physical asset.

2. What are the most commonly traded oil types?

Saudi Arabia, Russia, and the United States are the three main oil producers, and West Texas Intermediate (WTI) oil is crude from wells in the US. Brent oil, on the other hand, is used as a benchmark while determining gasoline prices and it is physically and financially traded on markets around the North Sea of Northwest Europe. Dubai crude is also used as an oil marker, and it is a medium sour crude oil that is extracted from Dubai.

3. What factors have an impact on the WTI oil price?

WTI oil prices are frequently changing, and there are a wide range of factors that cause them to move, including international and internal politics, geopolitical tensions and insecurity, increase or decrease in demand or supply, and competition from other energy sources like wind and solar power, for example.

4. Is WTI oil trading worthwhile?

WTI oil is one of the most chosen assets for investment and trading, and many traders prefer it when they want to diversify their portfolios and manage their risks. The large price swings are, without a doubt, the most significant benefit of trading oil, and if traders get a feel for the direction in which the price moves, they will stand the chance to get a good profit. Trading WTI is a great option for traders who regularly follow the news because, as we mentioned already, internal and international politics are among the factors that cause its price to move.

5. Which is the best strategy for trading WTI oil

When the time comes to think about how you will trade oil from a strategic perspective, you should first pay enough attention to proper risk management. Some of the most preferred WTI oil trading styles are technical analysis, fundamental analysis, and wave analysis.