November 28, 2024 03:44 PM
Trade oil CFDs with City Index
Start trading CFDs on crude oil markets with tight spreads on award-winning platforms.
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Range of markets
Access over 25 different commodities markets, including gold and silver.
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Tight spreads
Trade with ultra-tight spreads from just 0.06pts on commodity markets.
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Ways to trade
Speculate on commodities as futures contracts, options or on spot price.
Why trade oil CFDs with City Index?
- Real-time market insight from our in-platform Reuters feed.
- Trade with leverage, so you can open a position with just a fraction of the trade’s value.
- Profit from both rising and falling oil prices.
- City Index is regulated in Australia since 2006.
- We are backed by StoneX, a Fortune 100, Nasdaq-listed company with 100 years of financial services experience.
CFD oil prices
What is an oil CFD?
An oil CFD is a derivative product that enables you to take a speculative position on one of the world’s most traded commodities.
Oil markets are often volatile, which presents opportunities for CFD traders to go long or short on futures prices, spot prices and oil-linked stocks.
Learn about oil futures
How to trade oil CFDs
1. Create a trading account or use a risk-free demo
2. Choose from oil futures, spot prices, or stocks and ETFs
3. Open your first position
4. Monitor your position using technical and fundamental analysis
Learn how to trade oil CFDs
What is oil?
Oil is one of the world’s most useful and sought-after commodities, attracting high interest from traders around the world. Because of its global importance, volatility in oil markets is often high which presents many opportunities for traders to speculate on its future price movement.
With City Index, you can go long or short on a range of oil CFD markets, including spot price markets or as futures contracts with expiries.
Oil CFD costs
Trading Brent oil and WTI through CFDs is commission free with City Index. Instead, you’re charged via the spread, which is the difference between the buy and sell price. For example, if WTI (US Crude) is trading at 68.56, with a 2.5 spread, you’d see a buy price of 6860.9 and a sell price of 6863.4.
And, because CFDs are leveraged, you only need to pay 10% of the full value of the trade you want to open. For example, if you want to place a CFD trade for $5,000 worth of Brent, you’d only need to pay $500 as the initial capital to open the trade. However, both your profit and loss would be calculated on the full $5,000 – creating the potential for magnified gains and risk.
Brent CFDs vs WTI CFDs
Brent crude CFDs – UK Crude on our platform – track the price of Brent futures. Brent is the benchmark for oil extracted from the North Sea, which has a low density and low sulphur content.
WTI crude CFDs – US Crude on our platform – follow the price of West Texas Intermediary futures. This is the benchmark for oil extracted from across the United States. It’s generally lighter and sweeter than Brent and contains even less sulphur.
Generally, Brent CFDs trade at a premium to WTI, because supply is lower while North America has ramped up shale and oil sand extraction. However, Brent CFDs and WTI CFDs have similar underlying contract specifications.
| Brent (UK) crude | WTI (US) crude | |
|---|---|---|
| Exchange | Intercontinental Exchange (ICE) | New York Mercantile Exchange (NYMEX) |
| Contract unit | 1,000 barrels | 1,000 barrels |
| Price quote | US dollars per barrel | US dollars per barrel |
| Minimum fluctuation (tick value) | 0.01 per barrel ($10) | 0.01 per barrel |
Spot prices for US and UK Crude are based on the prices of the futures with the nearest expiries – making it important to understand the underlying contracts.
Oil news and analysis
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November 26, 2024 06:23 PM
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November 25, 2024 07:00 PM
How to start oil trading
Learn how to start trading oil – including how the oil market works and what moves its price.
What moves the price of oil?
Discover how supply and demand factors influence the price of oil and the role OPEC plays in setting oil prices.
What’s the best oil trading platform?
Discover the features of City Index’s platform that give you an edge trading oil markets.
Oil CFD FAQs
What's the best way to trade oil?
The best way to trade oil depends on your individual goals, style and strategy. There are numerous ways to take your position on oil prices, and each brings unique benefits and drawbacks.
Most global oil trading takes place on futures markets. These financial derivatives facilitate the buying and selling of oil using contracts in which you trade oil at a set price on a set future date.
While retail traders can participate in the oil futures market, many choose to trade on futures prices using CFDs instead. These enable you to take a position on oil markets without ever owning the underlying asset itself.
Learn more about how CFDs work.
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What are the margin requirements for oil?
The margin requirement for City Index’s oil markets – including US Crude and UK Crude – is 10%. That means you’ll need 10% of your position’s total value in your account to open a trade.
Say, for example, that you want to buy three UK Crude CFDs at $8653. Your total position is worth (8653 * 3) $25,959, meaning you’ll need $2595.9 in your account as margin. The City Index will automatically convert that figure into your base currency and display it on the deal ticket, so you’ll always know how much you need to make a trade.
You can find margin requirements for every market we offer in the City Index platform, which you can access with a free demo account.
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What is an oil benchmark?
An oil benchmark is a crude oil market that acts as a reference point for the prices of oil drilled around the world. The two best-known oil benchmarks are US Crude (otherwise known as WTI) and UK Crude (known as Brent).
Beyond these two headline markets, dozens of oil benchmarks are used around the world. They help facilitate oil trading by acting as a guideline for the different varieties and grades of oil that are produced.
Different oil benchmarks will trade at different prices, according to the lightness and sweetness of the oil they represent. They will, however, tend to move in parallel – so if Brent Crude is moving up, chances are WTI will be up too.
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