By definition, oil trading is the act of buying and selling oil for a profit, either physically or by speculating on its market price.

Oil trading involves buying and selling crude oil or refined petroleum products (like gasoline and diesel) in financial markets to profit from price fluctuations. Traders can participate through spot markets (immediate delivery), futures contracts (agreements to buy/sell at a future date), or CFDs (speculating on price movements without owning the asset). Prices are influenced by supply-demand dynamics, geopolitical events, OPEC decisions, and economic data. Traders use fundamental analysis (e.g., inventory reports, production cuts) and technical analysis (chart patterns, trends) to predict movements. Major benchmarks like Brent Crude and WTI serve as global price references. Oil trading is highly volatile, offering significant profit potential but also substantial risk, making risk management strategies like stop-loss orders essential for participants, including hedgers, speculators, and institutional investors.