Oil prices are higher today following a decision Thursday by the Organization of the Petroleum Exporting Countries (OPEC) and its allies to go ahead with a plan to increase supply by 400,000 barrels per day (bpd) in January even as the Covid-19 Omicron variant raises concerns about forward demand.
Some investors were betting that OPEC+ would reduce the size of planned increase or delay it. OPEC Secretary General Mohammad Barkindo had previously warned of an oil surplus in the new year. Additionally, the US and other oil consuming nations announced plans to tap oil reserves to help offset rising petrol prices.
The cartel and its partners did say they will review the situation.
The decision to stay with the planned production increase is a point of contention with the US government. OPEC+ ignored a request by US President Joe Biden to raise output by more than 400,000 bdp, Forbes reported.
Furthermore, doubts exist about whether the targets will be met next year, as low capacity in multiple countries has already resulted in missed targets in November, per Reuters.
- Day range: $69.67–$70.70
- 52 week range: $47.82–$86.70
- Day range: $66.44–$68.71
- 52 week range: $44.66–$83.83
- Day range: $4.09–$4.28
- 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.