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The Very Basic Basics of Investing in Oil Futures


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Terminology of Investing in Oil Futures

Investing In Oil Futures

With the constant rise in gas prices, many investors want to start investing in oil futures; this is great, except many new investors have no idea what they are getting into.  The first thing to understand is that a single contract constitutes one thousand barrels of oil, similar to buying one thousand shares of a stock; this has a major impact, because if the value of oil goes up by a dollar, the contract’s value actually changes by one thousand dollars.  Understand how and when oil is traded is the first step in becoming successful in the world of oil trading.

 Learning the Trends of Investing in Oil Futures

There are all sorts of reports that comprise the trend analysis for oil futures.  The American Petroleum Institute publishes weekly reports concerning the supply and demand of oil.  OPEC also provides constant statements about the current status of oil around the world, which is often an indicator of what the future will hold.  Gathering information is vital and taking an annual look at oil is simply a must.  There are many seasonal fluctuations and understand the impact of weather will lead to smart investing.  Looking at the trading volume and average moving price are two key statistics in investing in oil.

Oil can be a difficult area to invest in, due to the constant need and constant fluctuations; not to mention the major shifts that occur from natural disasters, fires at processing plants, and issues with shipping vessels.  Taking everything into consideration can be difficult and this is the reason that practice is important.  Finding a practice account that allows real-time information is vital to becoming successful in this market.  Investing in Oil futures means entering into a rich market, but understanding all the moving parts takes lots of practice and lots of research.

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