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WTI Light Sweet (WTIUSD) is an energy commodity blending multiple crude such as West, Texas, and Intermediate. It is also traded on CFD as light sweet oil trade. Also known as US oil, it is characterized by being easy to be influenced by American development situation.
WTI Light Sweet is traded on the Mercantile Exchange in New York. It was listed in 1983 and now has established a solid position as a major futures trading in Mercantile. Regarding transactions, physical delivery is being carried out in Cushing in Oklahoma State.
There are two trading methods, electronic trading and public auction trading. Auction trading is from 9 am to 2:30 pm, electronic trading is 6 days excluding Saturday, between 6 pm and 5:15 pm trading time. The price of WTI Light Sweet is determined by this trading price. It is the center of world crude oil price, and it is also characterized that the WTI futures trading volume per day is larger than the output per day.
Since output is small compared to trading volume, crude oil that is actually being traded is blended. The price of WTI Light Sweet is also linked to the price of crude oil in Dubai and Europe and it has a big impact not only on crude oil prices but also on the world economy. And it also reflects the actual crude oil market in the United States.
WTI Light Sweet has done great price movements over and over in the past. We will introduce here the time and causes of the significant changes in the price of WTI Light Sweet.
It had been around $ 20 a barrel so far, but it jumped to around $ 40 a barrel during the Gulf War. However, it returned to the original level the following year. After that, although it fell nearly 15 dollars per barrel in 1994, there is no significant price movement.
In 1998, it broke to 10 dollars per barrel, and the past lowest record is updated. The reason is the progress of crude oil development. However, as demand for crude oil increased as the economy became active shortly afterwards, it turned to a significant upward trend.
In 2008, it set a highest record of 133 dollars per barrel. This is due to the subprime loan shock occurred and resource prices soared. Even now or in the past, there is no large price movement of that kind. The reaction is also very large, and it plummeted to 40 dollars per barrel in 2009 in the following year.
Between 10014 and 2015, the price of 100 dollars per barrel fell to $ 50 a barrel. This fall is the second largest, following the declining reaction to the surge in subprime loans. In addition to the deceleration of the world economy, it is caused by the expansion of shale oil production.
The price of WTI Light Sweet is affected when war and terrorism occur. When war and terrorism occurred in the past, the price was rising from the cautionary feeling that crude oil development will not progress. However, in recent years when war and terrorism occurred, the price of WTI Light Sweet is on a downward trend.
As war and terrorism occur and economic activity is sluggish, in addition to reducing crude oil consumption, it is the reason why shale oil is used instead of crude oil to survive even without crude oil. Even if the demand decreases, the supply is stable and the price drops.
China's economic activity is deeply involved in the price hike of WTI Light Sweet in the 21st century. Crude oil is used not only as a fuel but also for familiar daily commodities. As economic activity gets active, the amount of crude oil used will increase and the demand will increase for supply, so the price will rise.
Although the Chinese economy has a calm feeling, there are several countries in Southeast Asia including India, where economic development is prominent. As crude oil demand increases with rapid economic growth, the price of WTI Light Sweet may rise in the future.
The price of WTI Light Sweet is not determined only by actual output and consumption. Crude oil is one of financial products including CFD. It is said that the trading value of crude oil will go up to 100 trillion yen, but of course the investor's speculation will also affect the price of crude oil. In the past, prices have fallen to one-third compared to 1% supply increase. This is the price fluctuation caused by the financial market.
The rise in crude oil after the Lehman shock was also attributed to an increase in the number of people investing in crude oil due to caution against investing in money. In other words, we bought a lot of crude oil for risk hedging and encouraged price rise. The financial market continues to expand, and now it is no longer a situation where you can explain the price of crude oil just by balancing supply and demand.
WTI Light Sweet is a crude oil familiar to our lives. As the price of crude oil rises, gasoline costs will rise so that life will be greatly affected. It is a commodity that is closely related to the world economy and often conscious of daily life, so it is also recommended for beginners. However, let's be careful as there is a huge risk as there is a history that plummeted and skyrocketed several times in the past.