Conquering the Volatile Crude Oil Market: A Comprehensive Guide for Modern Traders

Why Crude Oil Has Become a “Delicacy” for Investors Seeking Opportunities

Since the beginning of 2020, the global energy market has experienced unprecedented fluctuations. WTI (USOIL) prices once dropped to $20 per barrel, and Brent (UKOIL) also saw sharp declines. The first notable event was the May oil contract price hitting -36.9 USD per barrel — a completely negative figure never before seen in oil trading history. On April 22nd, WTI lost 53% of its value, while Brent dropped 25%, creating a brutal yet highly profitable environment for those who know how to seize the opportunity.

The Real Drivers Behind the Oil Price Collapse

Unprecedented Decline in Consumption Demand

According to the U.S. Energy Information Administration (EIA), March 2020 saw oil consumption decrease by 11.4 million barrels per day compared to 2019. The forecast for the entire year of 2020 predicts a 6.5% decline — the largest since 1980 in energy industry history. When demand drops while supply remains abundant, economic law simply states that prices have nowhere to go but down.

U.S. Shale Oil Production Continues to Increase Pressure on the Market

Since 2015, the advent of shale oil extraction technology has turned the U.S. into a major player in global competition. By August 2018, the U.S. became the world’s largest oil producer. However, when demand declines faster than production capacity, storage facilities in the U.S. quickly fill up, forcing spot prices downward continuously.

The Confrontation Between OPEC and Independent Producers

Instead of cutting production to stabilize prices, OPEC — with major countries like Saudi Arabia and Russia — does not want to lose market share to competitors. Negotiations on production limits are stalled because the U.S. does not participate in mandatory output reduction agreements. As a result, crude oil prices continue to plummet due to supply exceeding demand.

The Strengthening of the US Dollar Adds Downward Pressure on Oil Prices

Since all oil transactions are priced in USD and most oil-exporting countries set their prices in dollars, a stronger currency reduces the purchasing power of oil. Global economic instability keeps the USD strong, further exerting downward pressure on crude oil prices.

Practical Opportunities for Oil Trading via CFD

The Truth About Negative Prices and Why They Don’t Affect You

When news outlets report negative prices, this only applies to physical oil traders who need storage. For investors using derivative tools like (CFD) contracts, prices can never be negative. This opens up opportunities for you to participate in the energy market without large capital or complex infrastructure.

How to Profit from Falling Markets

The current crude oil market, with 10%-30% volatility per session, creates an ideal environment for two main strategies:

First, short selling (Short) when you predict prices will continue to decline. With CFD tools, you can place a sell order at a high price and close the position when prices fall, thus profiting from the decline.

Second, bottom fishing by applying technical analysis to identify price zones where crude oil is likely to recover. Since oil prices never truly hit zero, a recovery is inevitable.

Maximizing Profits with Leverage

CFD allows you to use leverage — with $1, you can control a contract worth $100. In a highly volatile environment, combining short positions with leverage can amplify your potential gains.

Why Trading Crude Oil via CFD Is Superior to Other Methods

No Physical Ownership, Fast Trading

Unlike investing in oil exploration stocks or ETFs, CFDs let you profit from price fluctuations without physically owning or storing crude oil. You only need to predict the price direction correctly.

Flexibility in Both Bullish and Bearish Markets

With CFDs, you can make money regardless of market direction:

• If you expect prices to rise: place a Long order at a low level and sell when prices are higher
• If you expect prices to fall: place a Short order at a high level and buy back when prices are lower

Transparent and Controllable Trading Costs

Each CFD trade involves three main fees: spreads (chênh lệch), commissions (hoa hồng), and swaps (phí qua đêm). Different platforms have varying fee structures, so choosing a broker with low fees directly increases your profit.

24/5 Market Without Time Limitations

Unlike futures or options with expiration dates, CFDs have no deadline. You can open and close positions anytime, across any time zone, since the market operates 24 hours a day, 5 days a week.

Small Trade Size = Easier Risk Management

CFD trading involves smaller contract sizes than futures and options, helping individual investors better control risk on each trade.

Getting Started with Oil Investment

Trading WTI and Brent crude via CFDs is very simple. You need to:

1. Choose a trading platform with low fees and reliability
2. Open an account and deposit initial capital
3. Familiarize yourself with the interface, then execute your first trade

Many brokers, including leading CFD platforms, offer demo accounts for practice before trading with real money.

Conclusion: Why Now Is the Time to Start

Crude oil is a volatile market, sensitive to numerous changing factors — from global energy policies to OPEC negotiations. These fluctuations create golden opportunities for investors who know how to exploit them.

While there are many ways to participate in the oil market, such as buying exploration company stocks, trading futures contracts, or investing in ETFs, CFDs remain the most popular and accessible tool for investors looking to start oil trading with small capital and high flexibility.