A deep, liquid and volatile market, Crude Oil futures (CL) and Micro Crude Oil (MCL) futures are subject to swift price swings and offer frequent trading opportunities for speculators. Oil futures can be influenced by a number of factors including geopolitical, production, weather events and more.
Operated by the CME Group, WTI Crude Oil futures trade on the New York Mercantile Exchange (NYMEX), a futures exchange which handles energy carriers, metals and other physical commodities.
Fundamental Factors Which Can Impact Oil Prices
Due to its popularity worldwide, WTI Crude Oil is a benchmark for the energy sector. Understanding the dynamics of this global market can better prepare traders for volatility and rapid price movement.
Below are factors which can influence the price of oil:
- Energy Information Administration (EIA) reports, released every Wednesday, provide crucial information regarding US crude inventories which can help show trends in supply & demand.
- American Petroleum Institute (API) reports, released on Tuesdays, deliver total & regional crude inventories as well as refinery operations data.
- OPEC meetings, held periodically between 14 leading oil-exporting countries, can significantly impact oil prices.
- Refinery capacity reports include US oil production levels and can provide insight into supply & demand.
- GDP reports indicate the overall health of the US economy which can be correlated with consumer gasoline demand.
- Natural gas inventory reports can impact natural gas prices, which in turn can affect oil prices as they are sometimes used interchangeably (depending on which is cheaper).
- Weather events can affect both gas & oil consumption as well as production sites and oil pipelines.
- World events including elections, financial crises and international conflicts can influence oil prices.
- Trade policy changes can dramatically shift oil prices, as recently observed in the lifting of the US export ban.
The chart above displays price action in US Crude Oil futures (CL) over the last 12 years.
Get Started with NinjaTrader
NinjaTrader’s award-winning trading platform includes 100+ indicators right out of the box and is FREE for advanced charting and strategy backtesting. An immersive SIM trading experience allows you to explore and apply unique analysis to fine-tune your trading approach risk free.