What is commodity trading?

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Commodity trading covers the buying and selling of a large range of instruments including oil and gas, metals such as gold and silver and soft commodities like cocoa, coffee, wheat and sugar. Commodity trading is as old as the financial markets, and perhaps even older than that. The first example of an organised exchange for trading commodities dates back to Amsterdam in These days there are a whole host of markets available to trade with just a few clicks of a mouse or taps on your mobile device, but some commodities how to trade oil and gas online as popular as ever.

There are a range of commodities you can trade, including agricultural commodities such as corn, soybean and wheat. It's the energy markets, in the form of oil and gas trading, and metal markets like gold and silverhowever, that tend to be more popular with traders these days. The commodity markets are traded in a similar way to other types of financial markets, but there are some points to be aware of in order to avoid any shocks or surprises when dipping your toe into commodities trading.

In this article, we focus on two of the more actively traded commodities: As these are slightly different blends of oil, the prices vary depending on which one you are trading. Prices don't just depend on how much oil is being pumped out of the ground, for example. As economies slow and demand drops, the price of oil and other commodities also tends to follow suit. Since oil prices are also impacted by world events such as politics and socioeconomic situations, including the Middle East crisis, it helps as an oil trader to keep on top of news so as not to get caught out by an unexpected shift in oil prices.

Other factors influencing oil prices include decisions by the Organisation of Petroleum Exporting Countries OPEC and other major oil producing how to trade oil and gas online, such as Iran, on how much oil is produced and supplied to the market. An ability to try and forecast how well or badly the world economy may fare in the months ahead is a definite plus point when it comes to trading a commodity like oil.

But there is plenty of news that can cause fluctuations in the price on a day-to-day basis — and on an even shorter-term scale than that. If for example the US releases figures that show its economy how to trade oil and gas online improving more quickly than expected, this could cause a surge in the price of oil as traders start to bet that demand will increase, consequently putting up the cost of a barrel.

Or it could how to trade oil and gas online that an oil-producing country resists international pressure to stabilise oil prices by increasing production. This could see further slides in the oil price as investors worry that more of the commodity will be produced than is needed. It really is a market that can be buffeted by plenty of world events, so it pays to stay on top of major economic news releases. Another enduringly popular commodity is gold, which has long been considered a store of wealth and has held a special allure for many of us — as the Californian gold rush back in the s would undoubtedly attest.

Traditionally, in times of trouble and market volatility, gold is perceived as a 'safe haven' — somewhere for investors to store their money away from other riskier assets. Although the yellow metal can in theory be traded in many currencies, the typical market quote is to price gold in dollars, usually as 'dollars per troy ounce'.

This relationship to the US dollar is an important one and is another factor that will have an influence on the price of gold. If the how to trade oil and gas online becomes more attractive to investors and starts to rise, the price of gold will usually drop. In recent years, some people have seen the US dollar as a safe haven for their money and that has reduced the appeal of gold.

This is another aspect to weigh up when trading gold: For example, if the US central bank, the Federal Reserve, decided to cut interest rates, this would normally weaken the US dollar how to trade oil and gas online lift the price of gold. As with oil, because gold is such a global commodity it pays to keep a watchful eye on the major economic announcements such as interest rates and unemployment figures, which are released on a regular basis.

The energy markets are also popular among commodity traders. The advent of renewable energy has generated added interest for commodities such as national gas, heating oil and gasoline. One way to get a feel for commodity markets is to watch their moves over a period of time so you can experience the sort of things that happen and understand what makes prices change. CMC Markets is an execution-only service provider. The material whether or not it states any opinions is for general information purposes only, and does not take into account your personal circumstances or objectives.

Nothing in this material is or should be considered to be financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein. This website uses cookies. By continuing to use this website you agree to this.

Digital trading examples Digital trading strategy What is digital trading? Learn forex trading Forex trading examples Forex technical indicators Using leverage in forex trading Benefits of forex trading What is forex? How do I fund my account? How do I place a trade? Do you offer a demo account?

How can I switch accounts? Create an account Trade over 9. Open a demo CFD account. What is commodity trading? GSLOs work exactly the same as regular stop-loss orders, except that for a premium, they guarantee to close you out of a trade at the price you specify regardless of market volatility or gapping.

The how to trade oil and gas online is refunded in full if the GSLO is not triggered. Please remember that losses can exceed your deposits. Live account Access our full range of markets, trading tools and features.

Open a live account Losses can exceed your deposits. Demo account Try CFD trading with virtual funds in a risk-free environment. Open a demo account. Sign up for free. Live account Access how to trade oil and gas online full range of products, trading tools and features. CFD trading can result in losses that exceed your deposits. Ensure you understand the risks.

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Get your start in one of today's most reliable and lucrative industries. Oil and gas training offers a powerful way to begin gaining the special knowledge that can make you stand out to potential employers in this booming sector. It's an educational direction known for leading to high-paying opportunities that often come with many other terrific benefits.

That's frequently the true advantage of getting formal gas or oil field training. It can greatly increase your job possibilities and clear the way toward a long-term career that is consistently interesting and gratifying. And the programs are usually pretty quick to complete. In fact, getting a marketable introduction to important industry concepts like instrumentation, quality control, safety, and operational efficiency often takes less than a year.

So take an essential first step right now. Discover what the following oil and gas schools offer by exploring their programs. Or locate the options in your area by conducting a search based on your zip code. Energy resources are abundant across both the United States and Canada.

And even though more renewable forms of energy are being developed, nothing else yet matches the scale of the oil and natural gas sector. Plus, the domestic extraction and production of these two fossil fuels creates extraordinary benefits such as less reliance on importing foreign energy, greater national security, and millions of good jobs for Americans and Canadians.

Just take a look at the following stats to get a sense of the monumental significance of this industry:. And keep this fact in mind: The large profits achieved by this industry allow many petroleum-related employers to reward their workers with outstanding compensation packages.

Beyond just exceptional pay, a lot of oil and gas jobs come with attractive benefits like:. These are the people who provide hands-on assistance in the operation of equipment on drilling rigs or at pipeline facilities.

They help set up, service, and take down various pieces of equipment used for creating and operating wells and other petroleum extraction, distribution, or production machinery. They also frequently help with basic construction work and cleanup activities. Field workers typically perform their tasks outdoors and receive a lot of training on the job. But receiving a brief education at an oil and gas technology college or trade school can give you an edge when pursuing the best jobs. And getting into the industry at this level is a good way to begin a career with plenty of room for upward advancement.

Like field workers, oil and gas operators primarily work outdoors at project sites. Their jobs are a step up from that of entry-level fieldwork since they are responsible for the physical operation of anything from extraction rigs to facility control systems to pipeline equipment.

They also monitor drilling or other production activities, assess problems, and devise solutions to any issues that are hampering the safety or efficiency of on-site operations. With gas or oil field operator training, you can become part of the largest occupational category in the petroleum industry. Plus, you can specialize in the area you like best, whether that's seismic operations, field production, well services, plant or control center operations, or drilling rig operation.

This is another job category with a ton of variety. People in all kinds of specialized trades are actively involved in the daily functions of the oil and natural gas industries. Many of them primarily engage in maintenance or repair work, but many others also get to help design, fabricate, or assemble some of the equipment or materials used in the extraction, transportation, and processing of petroleum products. A few examples of the types of tradesmen and women essential to this sector include:.

Professionals in this category are typically specialists in a particular area related to the design, installation, and use of specific kinds of oil or gas-related equipment. For instance, in addition to design and drafting specialists , the industry employs a lot of people in fields like electrical, mechanical, chemical, geological, marine, and civil engineering technology. Technicians usually do a lot of their work in the field at petroleum extraction, processing, or refining sites.

And they perform a lot of hands-on tasks, often with the assistance of computers or portable devices. Technologists, on the other hand, are generally responsible for supervising technicians either directly or indirectly and tend to perform a lot more work inside an office.

They help contractors choose the most appropriate equipment and methods for its use. And they often oversee its installation and operation. One of the most fascinating areas of this category is oil and gas process technology.

Schools exist that can teach you many of the basics through programs related to instrumentation technician training and similar areas. And a lot of colleges also make it possible to become a technologist who specializes in oil and gas. Degrees in engineering technology can be earned from schools throughout the U. Here's a vocational area that is especially important to the petroleum industry.

It might not involve as much fieldwork, but it does play a significant role in the overall strength and growth of the sector. That's because administrative professionals are often involved in essential business operations related to things like regulatory affairs, customer relations, asset management, occupational safety, stakeholder relations, and environmental stewardship. It's why oil and gas administration schools focus on ensuring that their students graduate with plenty of specialized knowledge about the industry in addition to contemporary business and office skills.

Department of Energy , website last visited on March 2, Find a School Near You: Please enter a valid zip code. Find Oil and Gas Training. Find Oil and Gas Schools. Classroom Type Campus Online Both. Area of Study [Choose an Area of Study]. Program [Choose a Program].