Oil prices have dropped by up to 20% over the past month as countries around the world reimposed travel restrictions following alarm over the Omicron strain.
Markets await a decision later today from the Organization of the Petroleum Exporting Countries (OPEC) on whether it is going ahead with planned production increases.
Doubt over OPEC output increase
The originally scheduled increase of 400,000 bpd is under question and markets are not now expecting this to go ahead.
There remains a possibility of OPEC cutting output in the new year, which would be in line with the cautious approach seen in prior sessions this year.
A report released by the US Energy Information Administration has revealed high summer jet-fuel inventories led to refineries processing less crude oil in the subsequent months.
However, decline in demand has led to crude oil inventories falling less than seasonally expected.
US natural gas traded at around $4.24 today, a 26% decrease from a high of $5.71 in early November.
Continuing travel restrictions are likely to further reduce demand in the near future.
- Day range: $68.54 - $72.87
- 52-week range: $46.82 - $86.70
- Day range: $66.41 - $67.36
- 52-week range: $43.92 - £83.83
- Day range: $4.13 - $4.37
- 52-week range: $2.26 - $6.47
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.