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Key Factors Affecting Crude Oil Prices and Simple Crude Oil Trading Tips with daily strategies

Updated: Sep 3, 2023

How is crude oil different from refined oil? Key Factors Affecting Crude Oil Prices and Simple Crude Oil Trading Tips with daily strategies

Oil is an important factor in driving the economy of every country. which is currently very important in daily life Most travel and transportation in Thailand still rely on gasoline-powered vehicles. Although in the past there has been a distribution of goods by rail system. and automotive technology with the development of advanced electric vehicles

The refined oil used today is the raw material for production from “crude oil”, which is a liquid petroleum found in nature. that contain a mixture of several hydrocarbon compounds And there may be other substances mixed with such as sulfur, nitrogen, oxygen. When drilling up, the physical appearance will be black or brown.

Most of the world's major oil resources are located in the Middle East.

Most of the world's major oil fields are located in the Middle East, such as Saudi Arabia, Iran, Iraq, Kuwait, Qatar, the UAE. including Caribbean countries such as Venezuela, Colombia, Mexico and Trinidad, as well as the United States. In Thailand, crude oil is also produced by onshore sources such as the Sirikit field. The production resources in the Gulf of Thailand are mainly natural gas. But the amount of oil in Thailand is insufficient for the amount of use. Thailand therefore needs to import crude oil. to produce refined oil

Once the crude oil is brought up, it cannot be used immediately. because the various hydrocarbon compounds must be separated Therefore, it can be used according to the type of substance. which this process is called crude oil refining This will result in finished oil products such as automotive fuel. Jet fuel and fuel oil

The main refined oils are gasoline and diesel fuel. by gasoline It is a widely used fuel for gasoline engine cars and motorcycles. In Thailand, there are refineries that produce benzene according to Euro 4 standards and in the future, Thai refineries are ready to produce according to Euro 5 standards.

Gasohol E10, E20 and E85

In addition, gasoline is mixed with ethanol. To get gasohol E10, E20 and E85, which helps absorb agricultural products used as raw materials for ethanol production, such as cassava, sugarcane, etc.

The diesel fuel is the fuel used in diesel engines. The diesel fuel products are divided according to the properties used, namely high speed diesel. It is a product used in high speed engines such as diesel cars. and slow diesel It is a product used in low speed engines such as agricultural machinery.

Diesel sales in Thailand are set to contain 7% biodiesel or B7, and will be upgraded to B10 to increase biodiesel use in Thailand. This will help increase the absorption of palm oil in the country.

Currently, refined oil sales in Thailand are based on the Singapore market price. Because we import most of the oil. And the Singapore market price reflects the trading of all countries in the region. It is also the largest oil export market in Asia. High volumes make it difficult to manipulate prices by buyers and sellers. But the price will adjust according to the mechanism of demand - supply (Demand - Supply) of the market at that time.

There are 5 important factors affecting oil price:

1.Economic expansion and seasonal fuel demand When entering the period of economic expansion, economic activities will increase. and continually resulting in increased demand for oil And of course, that drives the price of oil higher.

2.Geopolitical factors affecting world oil prices have risen in recent years. especially the conflict in the Middle East. The tensions between the US and Iran have affected crude oil production in the past. factors and disasters It is clearly seen in the case of hurricanes in the United States. that resulted in refineries in the United States temporarily closed This caused the demand for crude oil for production to decrease. Crude oil prices may drop But refined oil prices may rise.

4.Factors in the US trade war and China that affect the expansion of the world economy and international trade This is an important factor affecting the economic slowdown in many countries and causing the oil price to fall. Although the past stance between the United States and China tends to improve But it is still an issue that is still uncertain.

5.The exchange rate factor is also involved. In the past, the baht was at an appreciation level. This lowers the cost of energy imports and affects the domestic retail oil price.

As for the use of alternative energy or renewable energy that tends to increase. This could lead to a drop in oil demand. and continually resulted in the oil price decline. while the use of renewable energy tends to increase But oil companies predict that in the short term it will not have a significant impact on oil consumption.

*OPEC's influence is very important to oil prices.

OPEC's influence is very important to oil prices.

Who is OPEC and why is it so important to oil prices?

The Organization of the Petroleum Exporting Countries (OPEC) It is an international organization formed at a conference in Baghdad, Iraq, on September 10-14, 1960, by Iraq, Iran, Kuwait, Saudi Arabia. and Venezuela and began to be joined by other countries: Libya (1962), United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Angola (2007) Gabon (discontinued in 2007) 1995, but returned again in 2016) Equatorial Guinea (2017) and Congo (2018). In total, OPEC has 13 member states.

During the first five years of its inception, OPEC was headquartered in Geneva. Switzerland then moved to Vienna Austria since September 1, 1965. OPEC aims to unite member countries that are petroleum producers. and agree on a unified price and production policy It allows OPEC member countries to export goods to consumer countries at reasonable prices. OPEC also assists Member States in developing trade in terms of economic support and technology promotion.

OPEC has a huge influence on oil prices. Because each member country is the world's largest oil holder, and more importantly, in 2016 OPEC joined forces with 10 non-member countries to form OPEC+ to help support OPEC in controlling oil prices and export goods OPEC+ countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan. OPEC+ controls up to 50 percent of the world's oil reserves and 90% of proven petroleum reserves. OPEC and OPEC+ coexist, allowing OPEC to easily control world oil prices.

Crude oil products from OPEC are important factors affecting oil prices. OPEC has issued a policy to control the amount of crude oil production of member countries. Therefore, when OPEC has a policy to reduce oil production. Therefore, the price of crude oil in the world market has risen. Especially when OPEC controls oil production in Saudi Arabia. It is a member country that is the largest crude oil producer in OPEC and the largest crude oil exporter in the world. Besides Saudi Arabia Russia is also a major oil exporter and is a participant in OPEC+. Saudi Arabia and Russia are two countries that play a key role in setting the world's oil prices.

OPEC plays a very important role in controlling oil prices. The price control of oil was made by an agreement to reduce the daily production. so that the amount of oil does not overflow the market so that the oil remains in demand And with reasonable prices, OPEC can also cooperate to produce more crude oil to fight oil price wars with non-member countries, such as the oil war between OPEC and the United States in 2014, where OPEC countries jointly produce more crude oil and export As a result, the price of crude oil fell to $70 per barrel. from the beginning in the year 2011-2014 used to be priced at $100 a barrel.

In addition to war with countries outside the group Member States may still be at war with each other. If there is no agreement on oil production restrictions, such as the oil war between Saudi Arabia and Russia in March 2020, whether it is a war between the bloc or the OPEC, it is the Organization of the Petroleum Producing Countries. that greatly influenced the price of oil

*Therefore, the daily news about OPEC is a very important factor and influence on the price of crude oil.

Easy Crude Oil Trading Tips with daily strategies

Easy Crude Oil Trading Tips with daily strategies

The oil market is quite different from currency pairs, metals or other assets. Because traders must have a very good understanding of oil. and also have to make quick trading decisions This is especially true when trading on a daily basis. Therefore, traders need to keep abreast of oil demand and supply news, as well as price action. and always changing trends

In addition, the price of oil fluctuates due to geographical factors. As a result, oil prices are quite sensitive. causing traders to consider various factors Always be thorough before deciding to trade oil. Whether it's Brent crude oil or WTI oil.

Keep an eye on the oil situation in the Persian Gulf.

Keep an eye on the oil situation in the Persian Gulf. by events will result in oil prices And the demand for oil is constantly changing. In addition, the oil situation in each season will be different as well.

Example: During August, the price of oil will go up. Due to the use of a large number of vehicles on the road meanwhile Oil prices will drop drastically in October as the holiday season is coming to an end.

In addition to various factors foregoing Climate also affects oil prices. And because we can't predict accurate weather conditions. This makes crude oil a relatively sensitive product. Compared to other instruments such as stocks, the price of oil rises in winter. and will fall in autumn and spring

The Link Between Oil Prices and the US Dollar

And the last technique is to find the link between oil prices and the US dollar (USD). The price of crude oil will also increase. And of course, if the dollar depreciates The price of oil will also fall. however Traders should keep track of historical data. and compare various factors to observe clear price patterns and forecast future price movements

More knowledge about oil futures contracts

1. The price of crude oil that we see on top financial websites including applications in various mobile phones It is mainly the price of WTI and Brent crude oil. It can be seen that their prices are different, with Brent being more expensive and having lower volatility.

2. WTI (West Texas Intermediate) is the price of crude oil produced and delivered in the United States The major production sites are located in Louisiana. Brent is the price of crude oil produced and delivered in the North Sea, including Norway, Scottland, Ekofisk, Oseberg and Forties.

The US crude oil is lighter and contains less sulfur. The quality is lower than that of oil produced and delivered at the North Sea. therefore have a lower price

3. The price of crude oil WTI and Brent that we see are usually contracts of different months, for example, WTI is the contract of the next month. and will expire from the 25th day up 4 working days of each month. For example, the May contract expires on April 21 and the last trading day is April 20.

As for Brent crude, the difference is that the Brent crude futures we see are the price of the two-month futures contract. The June handover contract has the last trading day on April 30.

thankfully - bangkokbiznews / / thestandard /

*Trend Line of oil prices (my personal analysis It does not affect any trading advice.)

*Trend Line of oil prices (my personal analysis It does not affect any trading advice.)

*Set the blue trend line to be an uptrend.

*Set the red trend line to be the downtrend.

*Set the yellow trend line be the siteway price range.

If we analyze from the large Timeframe, which is Weekly, it can be seen that the trend is prominent, Trend, the price of oil will be in the manner that if it goes up or down, it will be in the long term. Let's see, starting from

- During June 2017 - Aug. 2018 there is an uptrend. higher crude oil prices (Approximately 15 months)

- During Sep. 2018 - Dec. 2018, there is a downtrend. lower crude oil price (Period about 4 months)

- During Dec. 2018 - Dec. 2019 is a siteway, oil prices fluctuate. (Approximately 15 months)

- During Dec. 2019 - Apr. 2020 is a downtrend. lower crude oil price (Approximately 5 months duration)

- During Apr. 2020 - Jan. 2022, it is an uptrend. higher crude oil prices (Approximately 22 months)

- During Jan. 2022 - May 2022 is a siteway, oil prices fluctuate. (Approximately 5 months duration)

- And currently, during May 2022 - Sep. 2022, it is a downtrend. lower crude oil price (Approximately 5 months duration)

😄As noted It's a personal analysis. It does not affect any trading advice. (Taken from real oil price chart data)

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