Today, the issue of oil trading is significant for every beginner or an experienced trader. Before starting to engage in trade in a certain direction, it is worth considering the key points in order to avoid financial misunderstandings, namely global economic losses.
A problematic situation in the oil trade arises whereas it is always either too much or insufficient. This has become very noticeable over the past few years. Most markets are oversupplied, which in fact entails attempts by partners to agree among themselves with the possibility of limiting production.
There is a striking example of the oil trade process in two countries: the USA and the Russian Federation. According to indicators, the cost of oil production in the United States fell in price to $20 per barrel, as a result of approaching the cost of oil production in a more standard way. This financial situation is explained by the improvement of oil production technology. If in 2012 the cost of oil production was close to $100, then over 4 years the cost was reduced by 5 times.
The Ministry of Finance of the Russian Federation calculated possible losses in the market for the sale of raw materials. Based on the statistics of the project’s treasury materials for 2020–2022, the treasury will not receive close to 5% of GDP in case of the petroleum products price decrease in the amount of $10 per barrel.
In conclusion, we note that traders need to consider that the dollar is pegged to oil. Oil trading volumes have a standard unit of volume, which is 1000 barrels per oil contract. It is supposed, that beyond the range of Forex, each trader has the opportunity to regulate any volumes, calculating them in tons and wagons.