USOIL and UKOIL are both important sources of energy for mankind, but what is the difference between USOIL vs UKOIL?
Although not all forex brokers provide Oil instruments on their platforms. However, there have been several CFD forex brokers that provide Oil instruments. Traders can start trading with a spread in CFD.
USOIL is oil that refers to West Texas Intermediary (WTI), it is oil produced by the United States. While UKOIL is oil that refers to Brent Crude, it is oil produced from the North Sea, on the European continent.
The two crude oils have some differences, this article will attempt to dig into them.
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- 1 What is USOIL?
- 2 What is UKOIL
- 3 Can I trade oil on MetaTrader 4?
- 4 What is the difference between Crude oil and Brent oil?
- 5 Why is it called Brent crude?
- 6 USOIL price prediction 2021
- 7 USOIL Price analysis Tradingview
- 8 Final Thought
What is USOIL?
USOIL refers to a ticker symbol in a CFD instrument that takes the price of the underlying West Texas Intermediate (WTI). West Texas Intermediate is a type of petroleum that has low sulfur and low density. Distillation is mainly carried out in the Gulf region and the United States.
Another broker that uses the tick symbol in forex broker platforms is XTIUSD. One of the brokers that have the symbol for the USOIL instrument is FXCM, while the XTIUSD pair is widely used by other forex brokers such as FXOpen which is included in the Commodity available market category. USOIL and XTIUSD both taken the underlying price from WTI.
The characteristics of WTI production oil are lighter and easier to process, and sweeter than Brent oil. With a sulfur content of only 0.24 percent, WTI oil is widely used as an ingredient for making gasoline.
Trading WTI futures contracts, listed on the NYMEX (New York Mercantile Exchange) from the CME (Chicago Mercantile Exchange). While the delivery location for WTI crude futures is in Cushing, Oklahoma.
USOIL Contract specifications
- The contract specifications for WTI oil are 1000 barrels with the symbol CL, denominated in US dollars and cents, settlement physical delivery.
- While USOIL describes the WTI market with a lower contract, 10 barrels, the symbol USOIL, using dollar and cent denominations, financial settlement.
The USOIL uses low contract values, enabling active retail traders in the world’s most popular commodities.
USOIL Price Tradingview
What is UKOIL
UKOIL is a product in financial markets that refers to North Sea Brent (Brent) crude oil. Brent Crude is the name for oil production by the North Sea (Europe). The mine opened in 1970 and has been the basis for price formation since 1971.
Brent crude oil represents prices for the region mainly Europe, Asia, Africa, and the Middle East. Brent production is carried out in an offshore capacity for a low cost.
In the spot forex market, using the symbol for the XBRUSD. One of the brokers that provide this pair of instruments is OctaFX. XBRUSD reflects the price of Crude, Brent, or London oil, accounting for two-thirds of oil deposits worldwide.
The character of Brent Oil is as Sweet Light Crude Oil. This means that the texture density is relatively low. And also tastes sweet because of the little sulfur content. But compared to WTI, Brent’s sulfur content is still higher. The difference is a lot of WTI oil for gasoline production, while Brent is mostly for diesel production.
Brent oil is widely traded electronically on the Intercontinental Exchange (ICE) Europe.
UKOIL Contract specification
- Trading Brent Oil Futures using symbol B with a contract size of 1000 barrels, denominated in US dollars and cents, settlement physical delivery.
- The UKOIL in CFD follows the Brent Oil contract relatively closely, with a contract size of 10 barrels, denominated in US dollars and cents, financial settlement.
#UKOIL oil prices usually depend on the geopolitical situation, extraction volume, and other global conditions.
UKOIL Price Tradingview
Can I trade oil on MetaTrader 4?
Several forex brokers currently offer oil instruments on the MT4 platform. Although not all brokers provide oil instruments on MT4, there are also brokers that provide it on the MT5 platform.
- FXOpen, pair symbol XBRUSD, XTIUSD, leverage 1:10.
- Forex.com, instrument symbol, UK Crude Oil, US crude Oil, margin 1%.
- OctaFX, instrument symbol, XTIUSD, XBRUSD, leverage 1:50.
- TitanFX, instrument symbo, XTIUSD, XBRUSD, leverage 1:500.
- Liteforex, instrument symbol, UKBRENT, USCRUDE, Sp[read 2.0 ECN, Classic account 81, Cent 8.1.
- FBS, instrument symbol XBRUSD, XTIUSD, leverage 1:10.
- FXTM, instrument symbol, UK Brent Oil, US Crude Oil. leverage 1:10.
- Instaforex,instrument symbol, #CL.
What is the difference between Crude oil and Brent oil?
Why is Brent crude’s biggest difference between Brent Oil and Crude Oil is the location of their respective oil fields?
- The Brent oil fields are located in the North Sea as in Norway and others. Meanwhile, Crude Oil comes from oil fields in the United States such as Texas, Louisiana, and others.
- The price of Brent Oil is the reference for the standard price of OPEC (Organization of the Petroleum Exporting Countries), which is an organization consisting world’s largest oil-exporting countries. OPEC’s role regulates most of the production and distribution of crude oil as well as prices for oil supplying countries. Therefore OPEC has a strong influence globally.
- Meanwhile, the standard for oil prices in the United States follows the WTI standard. Most WTI oil to meet the very high energy needs in the United States, the price is lower than the standard price of Brent Oil.
- Brent Oil is traded in futures on the London exchange, namely on the ICE (Intercontinental Exchange). While WTI is traded in futures on the NYMEX (New York Mercantile Exchange).
- Both include Sweet Light Oil, but the sulfur content of WTI is lower than that of Brent. WTI is processed into gasoline while Brent is processed into diesel fuel.
WTI crude oil has a lower sulfur content than Brent. In addition to the price difference, there is also a Quality Spread (difference in terms of quality) when trading WTI oil.
Because the two crudes come from different locations, Brent in Europe and WTI in North America. So distribution costs are also affected by Location Spread.
The nominal price of crude oil is only one of the factors involved in understanding the crude oil market. The spread between Brent and WTI is a perfect example of how quality and locational spread affect the structure and final price of crude oil worldwide.
Difference cost production process
WTI Oil has a lower sulfur content than Brent Oil, this is the reason for its simpler processing and lower production costs. Therefore it causes a price difference of around 2.50-4 USD between Brent and WTI.
Why is it called Brent crude?
Citing to the Wikipedia page, “Brent” comes from the naming policy of Shell UK Exploration and Production, which operates on behalf of ExxonMobil and Royal Dutch Shell. Brent is the name of the bird in this case the goose which later became the name of all the oil fields operating there.
Royal Dutch Shell owns and manages the Brent Crude oil refinery. This oil refinery is located in the northern seas of Northwestern Europe between the islands of Shetland and Norway.
The Brent Crude refinery was first discovered in 1971. Initially, it was estimated that the crude oil production period at this refinery would only last up to 25 years.
However, due to the continuous research efforts carried out by Royal Dutch Shell as the manager of the oil refinery and the company’s partner, Esso Exploration and Production UK (ESSO), the oil refinery is still able to produce.
To date, Royal Dutch Shell through its Brent Crude refinery has managed to produce approximately 3 billion barrels of crude oil. Meanwhile, half a million barrels of crude oil have been produced by this company from the Brent oil refinery. This happened in 1976.
Brent Crude as a benchmark for crude oil prices in the world
Oil transactions internationally are also through exchanges. Although currently there are 46 oil-exporting countries in the world, the majority of oil prices are based on crude oil from the three largest oil refineries in the world, namely Brent Crude, West Texas Intermediate, and Dubai Crude.
The price of crude oil produced by Brent Crude has always been one of the benchmarks for world crude oil prices. Especially for the benchmark of oil prices used by the association of oil-exporting countries in the world, aka OPEC (the Organization of the Petroleum Exporting Countries).
USOIL price prediction 2021
The trend of USOIL oil prices in 2021 has an upward trend. The current price of USOIL oil according to the Tradingview Chart is $67,070. Slightly up from the previous day, but still low from its 2021 high of $76 in early July.
EIA Oil price forecast
EIA predicts there will be an increase in oil consumption in the market in 2021 and brings the price to $68.71 for Brent Oil forecasting. Meanwhile, WTI prices have an average of $2 lower than the price of Brent oil.
EIA estimates the global demand for oil to reach 98.8 million b/d of petroleum and liquid fuels. However, the forecasting could be false due to reports of a spike in coronavirus cases in the United States.
EIA Oil price forecast reach $72 per barrel in second half 2021
On another page, the EIA estimates that Brent oil prices will reach $72 per barrel in the second half of 2021, then decline in 2022 to around $67 per barrel.
In the fourth quarter, the price of oil is estimated at $71 per barrel, and in July the price is expected to fall to $69 per barrel.
The EIA further forecasts global July oil production of nearly 210,000 b/d in 2H21. While the OPEC crude oil production forecast, there is a decrease of 110,000 b/d in 2H21.
Then the 2022 forecast, the EIA forecasts for US and OPEC production, resulting in an estimate of global petroleum production remaining at 101.8 million b/d at the July STEO.
OECD Brent Oil prediction
Looking at the history of Crude oil prices since 2000-2020, it formed its highest price in 2012 above $100 per barrel. The price then declined to 2016 below $45 per barrel, while 2020’s lowest price was around $36 per barrel.
The OECD predicts the price of Brent Oil in 2021 at a price range of $63.98, and 2022 is projected at a price range of $65 per barrel.
European Commissions Oil price prediction
European Commissions predicts Brent oil price in 2021 at around $56 per barrel.
IMF Brent Oil forecasting
The IMF projections the price of Brent oil in 2021 at a price range of $59.74, in 2022 at a price range of $56.23, in 2023 at a price range of $54.11.
Oil price prediction citing from KNOEMA.
USOIL Price analysis Tradingview
Crude oil rebounded at the daily 200 EMA formed a bullish Morubozu candle on the daily time frame as a rejection signal at this support area. This reason was strongly influenced by China which succeeded in suppressing the spread of the delta variant and increasing buying sentiment on crude oil.
In addition, the thing that resulted in the increase in crude oil was influenced by a deadly fire by one of the Mexican-owned oil companies on an offshore platform in the southern Gulf of Mexico.
And because this event cut production by 444,000 barrels per day which would reduce stockpiles to the global market. However, there is potential for a false break of the triple top area’s resistance to make the bearish trend take control again.
There is potential for head & shoulders if the price moves down and is stuck at $57.72/barrel. The correlation of the USD/CAD pair is also currently bringing the pair down and is still resting on the 200 daily EMA support area.
Oil is still a global energy need, dependence on oil still dominates in many emerging countries, although the development of new and renewable energy continues to be pursued. However, oil is still an important commodity in the global economy.
Price and supply adjustments are pursued and regulated to meet the needs and the world.
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