Hello everyone welcome to your website. Earlier I have told you about Government bonds, ford stock, Amazon stock, mutual funds, Disney stock etc. If you want to know about them then definitely read the articles written by us on them. In this article we are going to tell about “How to invest in crude oil”.In this time Investment in commodity is also very important as others. Many of you are heard about crude oil.It is also a type of commodity. Some questions about crude oil like what is crude oil, What are the factors affecting crude oil prices?, How to trade crude oil?, Where can one trade crude oil in India?, Uses of crude Oil? Etc So stay tuned with our article till the end.
What is crude oil?
It is important to understand a few basic property of crude oil, the key raw material processed in a refinery. crude oils are not all the same but very in colour, composition and consistency. They are generally classified as light or heavy and sweet sour. Unlike water, crude oil is not a chemical compound. Crude oil is a complex mixture of molecules consisting of compounds found by hydrogen and carbon atoms called hydrocarbon. In the US crude oil volumes are measured in barrel with each barrel equally 42 us gallons. This custom is times from the early days of the Pennsylvania oil fields when oil was shift in 15 gallon wine barrels. The origin of sweet and short terminology to describe the sulphur content in crude oil has more to do with test then you may think.
The method used to determine if kerosene was suitable for New York and Philadelphia market watch to taste it. if the desert thought it was sweet it passed, if it tasted sour, it was rejected as having too much sulphur. It’s common for crude oil to be identified by their origin and characteristics such as West Texas intermediate or Nigerian Bony light. The economic value of a crude increases as its API gravity increases (as it greater lighter) and as it sulphur content decreases.
How to trade crude oil?
If you want to buy or sell crude oil then you will have to open a demat account. To open a demat account some documents required like pan card, adhar card, Phone number, bank passbook. Firstly you have to find a broker then apply for open a demat account. Once your demat account activate then you will have to active a section of commodity buy and sell from there you are able to buy and sell crude oil.
Where can one trade crude oil in India?
You can trade in MCX. Not active anywhere else. Can trade in crude oil related stock in equity and in Etfs. ETF’S meanings exchange traded funds. In India there is no EtF for crude oil till now. But if you want to invest outside then you can invest in outside ETF. You know you can invest in outside us equity from India? Yes you can directly invest. There are multiple broker including Kotak securities.
Uses of crude Oil?
Now let’s see what are the usage of crude oil. Is crude oil used for burning candles at home?- ghee used, which is not extracted from crude oil. It comes from cow. Crude oil is not edible. never eat it. where is it used? For Oil. For anything to burn, to set on fire then kerosene. We don’t use kerosene in candles. That’s why people say use bottle of glass. Or made of soil. Friends use muddy bottles. Why using plastic? Stop using plastic. After that, flast/ box containing in it. There are famous brands that make only synthetic clothes. Cosmetic, lipstick and other things so many things. Anything that you say around it takes 360 degree view everything has crude oil in it that’s why I said it’s a mother of all commodities.
What are the factors affecting crude oil prices?
It’s mainly production and consumption of crude oil supply and demand, new resources, inventory data consumption pattern and global events.
Production and consumption – the most production is done in opaque region whose leader is Saudi Arabia reached super rich people. There are many families who rules. Conflict goes on to because where there is a money there in fighting. Saudi Arabia, Russia. Russia 62 65% economic dependent on crude oil.
Supply and demand – as of 2019 the average American uses 3 iron or petroleum products everyday. These Americans consume too much oil. Why they have a habit of travelling in cars and the busy such a cars who is average is very less. Life Ford, it rubbish no average only there are a car name hummer. As 42 gallon approved to produces roughly 45 balance of petroleum which is used for all shorts of fuels further down the road. Developing countries increasing their demand with faster development. Global nature of oil reduces price pressure from supply and demand point of view. OPEC production curts and similar announcement.
New resources – New resources keep coming up from time to time putting at downwards pressure on price even during time of every demand. Example canadians and US shale oil, etc. extraction coast or higher for new resources so competition life in low supply, High price environments.
If you want to trade in commodity like crude oil then it may be a good decision but if you are a beginner then please start it with equity don’t go very fast. Firstly start with equity if you will experience some time then you start with equity. Never risk more than 1 percent of your total trading funds. Always invest in many area.
1. How much is crude oil price today?
114.2 (Brent Crude)
2. Which country exports the most oil?
3. Who controls the price of oils today?
Members of OPEC
4. Who is biggest importer of oil ?
5. What is crude oil mainly used for?
As a fuel and combustible
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