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5 Best Crude Oil Trading Brokers for 2020 • Benzinga

Crude oil trading brokers are typically online brokers that provide services for contracts for difference (CFDs) or futures contracts. Since CFD trading isn’t legal in the U.S., this article focuses on brokers that support trading in crude oil futures.

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Crude oil trading brokers are typically online brokers that provide services for contracts for difference (CFDs) or futures contracts. Since CFD trading isn’t legal in the U.S., this article focuses on brokers that support trading in crude oil futures.

Take a look at our top crude oil brokers to get started.

Best Crude Oil Brokers:

What You Need to Know About Trading Crude Oil 

Like the stock market, the crude oil market is made up of different participants that include both investors and speculators. But the crude oil market differs because it is more prone to volatile swings due to geopolitical forces. 

The 2 main types of oil that futures contracts are based on are West Texas Intermediate (WTI) and North Sea Brent. WTI is a lighter and sweeter type of oil better for gasoline production with a low sulfur content of around 0.24%. North Sea Brent is heavier and best for diesel fuel production. It has a sulfur content of roughly 0.37%. In the oil industry, crude oil with a sulfur content below 0.5% is considered “sweet”.

The modern history of the crude oil market began in the 1970s. Then crude oil prices spiked to more than $100 per barrel after Saudi Arabia imposed an embargo on the commodity. Oil prices declined in the 1980s as supplies increased. The price of crude oil had fallen below $10 per barrel by 1998, which marked a major low point at the time. 

Prices then exploded higher, and the price of crude oil hit its all-time high of $145.31 per barrel in July 2008 to coincide with the global financial crisis. Since 2008, oil prices have fluctuated between $32 and $112 per barrel. The commodity currently trades at $53.12 per barrel for WTI and $58.82 for Brent crude. The price difference is known as the Brent/WTI spread. 

If you can’t trade CFDs because you live in the U.S. — trade crude oil via the U.S. futures markets and using exchange-traded funds (ETFs). FOREX.com offers crude oil CFD trading outside the U.S. for a 1% margin fee on the MetaTrader 4 or FOREX.com trading platforms.

An important oil futures contract is the WTI crude oil contract that trades on the New York Mercantile Exchange (NYMEX) under the symbol CL. It represents 1,000 barrels of oil.

Another is the NYMEX’s Brent crude oil contract that trades under the symbol BZ — it’s also based on 1,000 barrels of oil. The smaller CME Group’s E-mini crude oil futures contract trades under the symbol QL and represents 500 barrels per contract.

Things to Consider Before You Invest in Crude Oil

  • Research the market. Many influences that can affect the price of crude oil. Geopolitical events in the Middle East, North Sea, Russia, Canada, Nigeria and Angola generally impact the oil market. Factors that influence demand from the European Union, U.S., Japan and other Western economies that import oil also have an effect. 
  • Trade with a plan. Outline your strategy with sound risk and money management. Include the parameters for entering and exiting trades, the amount of risk you plan to take and your objective for exiting the trade. You can source a trading plan from another trader or use a social trading service if needed. 
  • Test your plan. Many online brokers give you the option of opening a demo account to practice trading. You can test your plan in the demo account before you commit any funds to a live account. 
  • Pick a broker. You’ll probably have a feel for the oil market and the best brokerage for you after you trade in some virtual accounts. Make sure to carefully consider your needs before opening an account.
  • Start trading. Open and fund your account, research your plan and get started. Make sure that you carefully assess and manage the risk involved in each trade. Set some safe stop-loss levels to avoid blowing out your account. 

The Best Crude Oil Brokers

Determine your needs to find the best online brokerage for trading in crude oil. You can find our picks for the best crude oil futures brokers for U.S. traders below. 

Commissions

$0
$6.95 for OTC Stocks

Account Minimum

$0

Broker 1: TD Ameritrade

TD Ameritrade gets our top spot for excellent execution that includes oil futures. The broker’s trading software and the thinkorswim platform give serious traders an edge. You’ll get access to advanced research and analysis tools, and automatic features and market scans will help you generate trading ideas. 

TD Ameritrade also provides a web-based platform and a mobile option for Android and iOS devices. The broker can trade the 3 standard CL, QM and BZ crude oil futures. Trading hours for crude oil futures start on Sunday at 5 p.m. EST and run until 4 p.m. EST on Friday (with a 1-hour break from 4 p.m. to 5 p.m. each weekday). 

TD Ameritrade doesn’t require a minimum deposit. But you must deposit at least $2,000 as margin to be considered for a futures and options account. Commissions for oil futures are a standard $2.25 per contract plus exchange and regulatory fees. 

Commissions

$0.005 per share
minimum $1 and maximum 0.5% of trade value; volume discount available

Account Minimum

$0

Broker 2: Interactive Brokers 

Barron’s top online broker for 2019 is Interactive Brokers. This brokerage is aimed at more advanced high-volume traders. It gives you access to trade a myriad of tradeable assets, including U.S. oil futures. Interactive Brokers also offers execution services in more than 125 world markets. 

Its trading platforms include the easy-to-use Client Portal and the web-based IBKR WebTrader. More advanced traders will also appreciate the more sophisticated IBKR Pro Trader Workstation (TWS) desktop and mobile platforms. The broker also has an application programming interface (API) if you want to get your own trading algorithm software written. 

Interactive Brokers has tiered and fixed commission schedules. The tiered schedule lowers commissions as your trade volume increases, while the fixed schedule charges a mere $0.85 per U.S. futures and futures options contracts plus exchange and regulatory fees. 

Interactive Brokers charges inactivity fees on inactive accounts, so keep that in mind if you plan on taking trading breaks. It also requires a minimum deposit of $10,000 to open an account. 

Commissions

$0

Account Minimum

$0

Broker 3: E*TRADE

E*TRADE gets our number 3 position for its impressive research center powered by the CME Group — the world’s largest futures exchange. E*TRADE also offers a comprehensive list of options on oil futures.  

E*TRADE’s trading platform is easy to navigate for traders at all levels. The company also offers a high-tech custody platform for financial advisors, as well as a top-rated stock plan administration platform. 

The 3 standard CL, QM and BZ crude oil futures contracts traded on U.S. exchanges can be traded. E*TRADE charges $1.50 per futures contract plus exchange and regulatory fees. Oil futures can also be traded in an IRA account.

Another selling point is its associated bank and extensive educational resources like daily video market commentary. E*TRADE has a minimum of $10,000 to open a futures trading account. 

Commissions

$0.09 per micro contract

Account Minimum

$400

Broker 4: NinjaTrader

NinjaTrader has an excellent trading platform for novice and advanced traders alike. You can access unlimited simulated forex trading, unlimited support and daily training sessions and a free 24-hour emergency desk. 

NinjaTrader features more than 100 technical indicators, advanced charting features and thousands of 3rd-party applications for automating your trading. The platform also gives you control of your own data feed to test your trading strategies.

You can even trade micro-sized futures contracts for a $50 margin, while E-mini contracts require $500 to margin. You only need $400 to open a futures account with NinjaTrader.

NinjaTrader has a number of educational resources and a news and blog section. You can try the broker’s futures trading platform at no charge for 2 weeks in a demo account powered by live market data.    

Commissions

$0.19 – $0.49

Account Minimum

$2,000

Broker 5: Discount Trading

Discount Trading made our list for its low commissions and the variety of trading platforms for traders at all levels. Discount Trading’s commissions are among the lowest in the industry, so it’s perfect for day traders and high-volume or high-frequency traders. 

If you trade more than 50,000 contracts a month, for example, you pay only $0.19 per contract. For less active traders, futures commissions are $0.49 per side — so buying and selling 1 futures contract would cost you less than $1 after exchange and regulatory fees.

Discount Trading features 20 different trading platforms that include eSignal, barchartTrader, CGQ Trader, CGQ Integrated Client, Trading Technologies, Firetip, TradingView and Sierra Chart.  

You can also get a free mobile app for Android or iOS devices or access the broker’s web-based application. It offers 5 different redundant routing solutions to meet the needs of advanced traders. 

Next Steps 

You’re ready to move on to live trading once you’ve tested your plan in the demo account. Oil futures can be extremely volatile, so they’re the perfect vehicle for day and high volume traders. 

Be aware that the price of oil has traditionally been a function of the big world producers, so any disruptions in the supply lines can directly affect the price quickly and substantially. Moves of 2% to 3% and even as much as 10% to 20% occur often, so trade with stop loss orders at all times to prevent excessive losses. 

Crude oil prices react to many variables, which is why oil traders keep an eye on the news. Make sure you watch world events closely when you trade oil futures.   

Hire a Pro: Compare Financial Advisors In Your Area

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Donald Trump blasts ‘fools’ who oppose good Russian ties

US President-elect Donald Trump has posted a progression of tweets censuring the individuals who contradict great relations with Russia as “‘dumb’ individuals, or nitwits”.

Mr Trump promised to work with Russia “to comprehend a portion of the numerous… squeezing issues and issues of the WORLD!”

His remarks came after an insight report said Russia’s leader had attempted to help a Trump race triumph.

Mr Trump said Democrats were to be faulted for “gross carelessness” in permitting their servers to be hacked.

In a progression of tweets on Saturday, Mr Trump said that having a decent association with Russia was “no terrible thing” and that “lone “idiotic” individuals, or simpletons, would believe that it is awful!”

He included that Russia would regard the US increasingly when he was president

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Bulls and Bears Took on More Currency Exposure in Week Through January

he most striking improvement among theoretical situating toward the finish of a year ago and the primary session of 2017 is not that modification were little. There was just a single gross theoretical position modification of more than 10k contracts. With sterling apparently not able to maintain even humble upticks, the bears added 13.1k contracts to the gross short position, lifting it to 120.2k contracts.

Or maybe, it is eminent that examiners for the most part added to positions, long and short, as opposed to close positions at the very end of the year. Examiners added to net long outside cash prospects positions, aside from in the Japanese yen and Swiss franc where 2.6k and 2.5k contracts were exchanged separately. Examiners likewise added to gross short positions. Here there was just a single exemption, the Japanese yen. Despite the fact that the dollar shut comprehensively higher in front of the end of the week, every one of the monetary forms we track here, spare the Mexican peso, picked up against the dollar in the three sessions since the finish of the CFTC reporting period.

Every once in a while it is helpful to review why many market members take a gander at the theoretical situating in the cash fates advertise. It is not that the outside trade is essentially a prospects showcase. It is principally an over-the-counter market in which every day turnover midpoints in abundance of $5 trillion a day.

Trade exchanged monetary forms and alternatives represented around 3% of the normal day by day turnover as indicated by the BIS study. Be that as it may, past reviews have discovered some contemporaneous connection between’s market heading and net position changes. We think it additionally offers knowledge into a specific market section of pattern supporters and energy brokers. It is not by any means the only device, yet one of a few data sources.

One ramifications of this is albeit theoretical positions in the money fates market are moderately extensive, it is still little contrasted and the money showcase. Along these lines, it is difficult to see the genuine essentialness of a record vast position, as though there is some market top. At some point, examiners are not driving the costs, possibly there is another fragment, national banks, enterprises, as well as genuine cash that is more essential at any given minute.

We invest some energy taking a gander at gross positions instead of just net theoretical positions, which is the more customary approach. We think a more granular look is frequently fundamental. There is a distinction between short-covering, for instance, and new purchasing, however it appears to be identical in the net. Additionally, the gross position is the place the introduction is not the net position. A net position of zero does not mean the market is nonpartisan. Net positions could be huge, which implies a short press or a negative stun could in any case troublesome. The positions that must be balanced are captured in the gross measure not the net figure.

We find numerous customers are likewise keen on theoretical situating in the US Treasuries and oil. The net and gross short theoretical Treasury position has swelled to new records. The bears added 23.8k contracts to the as of now record net short position, lifting it to 616.2k contracts. The bulls attempted to pick a base and added about 20k contracts to the gross long position, which now remains at 471.2k contracts. These modification prompted to a 3.8k contract increment in the net short position to 344.9k contracts.

The bulls delayed in the oil prospects toward the finish of 2016. They exchanged short of what one thousand contracts, leaving 608.1k gross in length contracts. The bears added 4.1k contracts to the gross short position, giving them 168k. These conformities trimmed the net long position by very nearly 5k contracts to 440.1k.

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3 ways to profit in the ‘year of the dollar’

In December, the Federal Reserve raised loan fees for the second time since the Great Recession and included the desire of a 2017 financing cost climb to its gauge. Furthermore, only a couple days prior, the abundantly anticipated minutes from the most recent Fed meeting demonstrated the most hawkish tone from the national bank in two years.

In the meantime, Europe has been dove into political turmoil after a year ago’s Brexit vote and the later abdication of Italy’s leader. Somewhere else, the Bank of Japan proceeds down the way of negative rates and forceful security purchasing.

Put it all together, and it isn’t astounding that the U.S. Dollar Index is up against 14-year highs.

Speculators may have missed so much discussion on account of babble about the Dow Jones Industrial Average at the end of the day almost hitting 20,000. Be that as it may, paying little respect to your assignment to stocks or your venture skyline, this sort of huge picture incline in the dollar implies right now is an ideal opportunity to position your portfolio to benefit and, maybe most critical, to keep away from a portion of the pitfalls that can originate from a solid local cash.

Here are a couple ideas dollar exchanges ought to consider:

Residential plays over multinationals

There’s a considerable measure of seek after shopper stocks in 2017 on account of an enhancing work market and any desires for a jolt under a GOP-controlled Congress and President Donald Trump. In any case, remember that not all retailers are made equivalent especially those with abroad operations that are adversely affected by the wide dissimilarity in monetary standards at this moment.

For example, retailer Wal-Mart Stores Inc.(WMT) said troublesome money trade rates shaved very nearly 2.5% off profit for each partake in the second quarter of 2016. On the other hand consider that in the monetary final quarter of 2016, athletic attire goliath Nike Inc.(NKE) saw its income development cut down the middle because of forex weights, from 12% year-over-year in consistent cash measures to only 6% including real money changes.

To take advantage of the “reflation” exchange that numerous financial specialists are counts on in 2017, you need to represent the headwinds that a solid dollar are making for multinationals at this moment. The most ideal approach to do that is to consider customer plays that do by far most of their business here in the U.S. – for example, Foot Locker Inc.(FL), which has been an uncommon splendid spot in retail throughout the most recent couple of years.

Supported money ETFs

Obviously, in the event that you need a steady portfolio, you can’t just purchase just local centered values. Geographic expansion is similarly as imperative as enhancement crosswise over parts and resource classes. Such a large number of financial specialists keep on holding worldwide plays in light of a legitimate concern for a balanced portfolio, regardless of the possibility that it implies battling a daunting struggle as a result of a solid dollar.

The uplifting news, notwithstanding, is that you don’t need to leave yourself to torment through a solid dollar and a powerless euro when you put resources into Europe. Nor do you need to stress over the yen-dollar conversion standard when you put resources into Japan. That is on account of there’s an entire group of cash supported ETFs to permit financial specialists to put their cash in outside business sectors yet keep away from forex issues.

Consider that Japan’s Nikkei 225 file is up around 25% from its July 2016 lows. The WisdomTree Japan Hedged Equity Fund(DXJ) is up 35% in a similar period on account of assurance from forex issues and a somewhat better-performing rundown of stocks – while the non-supported iShares MSCI Japan ETF(EWJ) is up only 10% in a similar period because of battling a difficult task against a solid dollar.

In the event that you need to differentiate your portfolio comprehensively, you ought to consider supported assets that incorporate the Japan-centered DXJ, the WisdomTree Europe Hedged Equity Fund(HEDJ) to play Europe or the iShares money Hedged MSCI EAFE ETF (HEFA) for developing markets.

Dollar list ETF

In the event that you are searching for an immediate play on a rising dollar as opposed to putting resources into stocks, figuring out how to exchange remote trade can appear like an overwhelming undertaking. Gratefully, there’s the PowerShares DB US Dollar Index Bullish Fund(UUP).

This ETF is attached to the U.S. Dollar Index, which is a measure of the greenback against a wicker container of other worldwide monetary standards including the yen and the euro. It’s a straight money play, however that doesn’t make it straightforward or hazard free. In the event that the dollar debilitates, you’ll lose cash similarly as though you’re putting resources into a stock that has fallen on difficult circumstances. Furthermore, obviously, PowerShares takes a little cut of your speculations en route that indicates 0.8% yearly, or $80 a year on each $10,000 contributed.

Still, in the event that you need to conjecture on the dollar or support against a solid U.S. cash keeping down other worldwide ventures on your rundown, it’s maybe the least demanding approach to do as such for generally financial specialists.

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