Differences between Investing vs Trading
Differences between Investing vs Trading
XTIUSD is a commodity pair representing the price of West Texas Intermediate (WTI) crude oil expressed in the US Dollar. West Texas Intermediate is a sweet crude oil refined to produce products like diesel and gasoline, and the USD is the number one most traded currency in the world.
Besides Dubai Crude and Brent, WTI is a popular oil price benchmark, and analysts use the XTIUSD oil live chart to determine the health of the United States economy. Even though two-thirds of global oil contracts use Brent as a benchmark, WTI is considered more attractive than Brent because of its low sulfur content (between 0.24% and 0.34%).
In general, oil with low sulfur content is easier to refine. WTI comes primarily from inland Texas and is refined in the Gulf of Mexico and the Midwest.
WTI oil and other commodities
There is a well-known saying on Wall Street that "commodities always move in tandem." By this, it is meant that the prices of different commodities (e.g. gold, oil brent, natgas, silver, platinum) are often highly correlated with each other. In other words, when the price of one commodity goes up, the prices of other commodities often tend to follow suit. There are a number of reasons for this strong relationship between commodities.
One is that commodities are often used as inputs in the production of other goods and services. For example, crude oil is used to produce gasoline, which is then used to power cars and trucks. As the price of crude oil goes up, the price of gasoline also tends to increase. This ultimately leads to higher prices for many other goods and services as companies pass on their higher costs to consumers. Another reason for the close relationship between commodities is that they are often traded in similar markets and subject to similar economic forces.
In 2014, domestic crude oil output in the United States increased, and this shale boom increased the production of WTI. Since then, the price of WTI has dropped and usually trades at a discount to other oil price benchmarks. Similar to other commodities, the production of WTI and the share price of XTIUSD is positively and negatively affected by economic and financial news.
In the past, the shale boom increased WTI output, while fears over economic recession have caused the price of WTI crude oil to drop. These are all factors to be aware of when looking at the share price of XTIUSD.
The XTIUSD price fluctuates depending on a range of external factors. Because of this, we need to consider the different ways we can capitalise on this volatility. Some individuals may find contract for difference (CFD) trading the best option because they can speculate on rising and falling oil price movements without owning the commodity.
You can trade CFDs through desktop platforms or mobile apps, which are more helpful than desktop trading. That's because CFD trading apps have push notifications that alert traders in real-time about price movements. Because the price of oil fluctuates all the time, you want to have these instant notifications turned on.
Buying and investing in individual oil stocks is the preferred option for those who want to own the commodity. Investing gives you direct ownership, which is not the case with CFD trading. Regardless of whether you're trading or buying XTIUSD, use various technical indicators and drawing tools offered by proprietary trading platforms like Skilling Trader to ensure you're getting the most out of the commodity pair.
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* The spreads provided are a reflection of the time-weighted average. Though Skilling attempts to provide competitive spreads during all trading hours, clients should note that these may vary and are susceptible to underlying market conditions. The above is provided for indicative purposes only. Clients are advised to check important news announcements on our Economic Calendar, which may result in the widening of spreads, amongst other instances.
The above spreads are applicable under normal trading conditions. Skilling has the right to amend the above spreads according to market conditions as per the 'Terms and Conditions'.
What are the differences between WTI and Brent oil?
WTI and Brent oil are two types of crude oil, each with its own differences though still connected by the same industry. The differences mainly lie in their production and place of origin, as WTI is produced in North America while Brent comes from the North Sea and is a major benchmark for pricing across Europe. Locally derived West Texas Intermediate (“WTI”) is a light sweet crude oil (lighter in color, lower sulfur content) that is preferred by refineries on the US Gulf Coast.
Whereas, Brent Crude Oil is extracted out at sea in the North Sea coming mainly from United Kingdom extractions and select European sites making it a more dense type of crude (darker to black-brown color and higher sulfur levels). Thus providing buyers with different variations of qualities when it comes to process.
What does WTI stand for?
WTI is an acronym for West Texas Intermediate - a type of crude oil that is used as a benchmark throughout the world. It originated in European markets, but its influence has been felt worldwide as customers use WTI to gauge the current rate of oil prices. It plays an integral role in providing an accurate price point and is considered one of the most dependable gauges within the industry.
WTI helps customers easily project and anticipate what their costs may be when it comes to purchasing this precious commodity.
How to trade WTI?
WTI trading is all about knowing the ebbs and flows of the Crude Oil market. WTI, also known as West Texas Intermediate, is actually a kind of commodity that traders can leverage in order to make a profit from buying and selling. WTI trading can be done through Contract for Differences (CFDs) or other futures markets and gives investors an advantage in terms of being able to capitalize on price movements by taking either long or short positions.
While WTI trading offers potential profits due to market volatility, it's important to understand the risks associated with commodities trading, as there are no guarantees of any returns at all times. It's wise to educate yourself before entering WTI trades, so you'll be prepared when it comes time to make decisions to manage your risk.
Why Trade [[data.name]]
Make the most of price fluctuations - no matter what direction the price swings and without the restrictions that come with owning the underlying asset.