Crude Oil

Crude Oil

Crude oil is one of the most universally observed energy markets in the world, making it the most liquid energy futures contract today. In fact, crude oil is so fundamental to the functioning of global economies that it is often traded as an asset class of its own.

Market Volatility and Opportunity

Our crude oil brokers have navigated clients through extreme market cycles from the peak of 147 dollars in 2008 to under 20 dollars during Covid, when futures briefly went to negative 40 dollars, and back to close to 140 dollars in 2022 during the Russia-Ukraine war. Each volatility event creates both risk and opportunity for sophisticated market participants.

Global Crude Benchmarks

While WTI and Brent remain the most liquid crude oil contracts, regional pricing differentials across Dubai, Oman, Urals and other global crude grades create arbitrage opportunities for cargo movements. Understanding these spreads and the factors that drive them is essential for optimizing physical crude transactions.

Physical vs Financial Markets

The crude oil market operates on two levels. Financial players trade paper contracts for risk management and speculation. Physical market participants must manage the complexities of actual cargo movement, including storage, transportation, quality specifications, and delivery logistics. Success requires expertise in both spheres.

Price Discovery and Risk Management

Real-time crude oil pricing reflects global supply and demand fundamentals, geopolitical events, inventory levels, refinery runs, and financial market flows. Effective crude oil trading requires constant monitoring of these variables and the ability to quickly adjust hedging strategies as market conditions evolve.