The most popularly traded types of oil are the US and Brent crude oil. US crude oil is known as West Texas Intermediate (WTI) and is characterised as “light” and “sweet” due to its low density and sulphur content. It is the primary oil price benchmark in North America. Brent refers to oil produced in the North Sea and is the pricing benchmark for about 80% of the globally traded crude oil. It is also characterised as “light” and “sweet,” but the oil tends to have higher sulphur content and density.

Oil is the most popularly traded commodity in the world. Oil trading can be done through futures, options, or Contracts for Difference (CFDs). While all three are derivative instruments to speculate on the future price movement in the oil markets, CFDs are perhaps the most popular. This is because you can trade oil without needing to take physical possession of the commodity. Learn more about the oil markets and how to trade the commodity with OneRoyal Academy.

A Contract for Difference (CFD) is an agreement to exchange the difference in price between the opening of the contract and its closing. You don't need to take ownership of the underlying asset to trade CFDs. Plus, CFDs allow you to speculate on both rising and falling oil prices. They give access to the global oil markets and allow you to expand your exposure even with low capital in your trading account through leverage. However, remember that since leverage increases market exposure, it also magnifies potential profits and losses. Risk management is crucial while trading oil via CFDs.

By trading with a regulated broker, you're protected against fraud, unfair practices and illegal activity. Also, regulated brokers comply with strict financial standards, ensuring the security of your money.