Oil forex trading is a means by which people from all over the world can trade oil futures contracts at the comfort of their own homes. It utilizes the worldwide international over-the-counter foreign exchange market to facilitate the trading using currencies from different countries. It is based on various financial centers from around the world that allows different of buyers and sellers to trade oil futures contracts at any point of the day, except during weekends.
In oil forex trading, the foreign exchange market settles the relative value of each currency. Oil forex trading ensures international trade and investment by making it possible for people from one country that uses a particular currency make a transaction with people from another country with a different currency. The result of this is a very liquid flow of financial capital globally due to the involvement of multiple countries in these trades.
Oil forex trading is especially important in the foreign exchange markets because oil is a very important commodity in the world today, notwithstanding global concerns about the environmental problems caused by it and the calls to reduce our dependency on it. As of now, there is no clear alternative for oil as a source of energy and therefore it is more likely that it will remain to be a valuable commodity for quite some time. And like most transactions in the foreign exchange markets, oil forex trading is affected by a variety of factors especially those that directly involves oil production.
One of the factors that constantly affect oil forex trading is the political conditions of countries that are directly involved in the production of oil. Instances such as a regime change or destabilization of governments in these countries can cause significant changes to the production of oil and cause repercussions in the oil forex trading markets. A particular group of countries to watch out for is the Organization of the Petroleum Exporting Countries or OPEC. This very influential group is composed of 12 oil exporting countries that has the ability to control the prices of oil. Therefore it is worth knowing the political conditions in these oil producing countries if you want to engage in oil forex trading to ensure that you make the right decisions in making transactions.