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Brent Oil Futures: Price Chart, Overview and How to Invest

December 01, 2021 14:09

With oil at multi-year highs, Brent oil futures have come under the spotlight as one of the preferred ways to invest in oil. This article will explain what oil futures are, detailing their historical development and their forecast We will also provide valuable tips to help you trade UKOIL futures, as well as provide you with a tutorial to easily invest in this asset. 

What Is Brent Crude Oil Futures? Overview  

Along with WTI, Brent is one of the two global references for oil prices. Brent oil refers more precisely to oil extracted from the North Sea.  Brent futures are financial instruments that allow you to bet on the price of Brent oil. With futures, you trade based on the price at the time of the trade, but for future delivery. Thus, as the name suggests, Brent futures allow you to bet on the future development of this oil.  

Brent oil futures are traded on markets such as CME and ICE. So, there are ICE brent crude oil futures and CME Brent crude oil futures. On ICE, the Brent oil futures symbol is BZ. Note that the price of Brent futures is always slightly higher than the price of WTI futures. This is because Brent oil is easier to transport than WTI oil due to the location of the resources, which justifies a premium on the price. 

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Brent Oil Futures Price History and Price Today 

Let’s look at the historical evolution of Brent oil futures‘ price to understand what historical variations have led to today’s Brent futures.

Brent Futures Historical Price

During its history, Brent futures marked an all-time low around $9.5 in December 1998 and recorded an all-time high around $145 per barrel in July 2008. But oil has not moved in a straight line throughout its history. Indeed, several crises and shocks have marked its evolution over the years.  

Below is a list of the main oil crises and shocks in the history of Brent oil futures.  

  • 1973 – The first oil shock in history: War between Israel and the Gulf States, leading to a 25% reduction in production in the Gulf States, which caused the price of oil to soar. 
  • 1979 – The fall of the Shah and the arrival of the Islamic Republic: The fall of the Shah of Iran and the establishment of the Islamic Republic led to an unprecedented political crisis, putting a brake on Iranian oil exports. The price of UKOIL futures exploded. 
  • 1986 – The counter-shock: Saudi Arabia suddenly increased its production, quickly followed by other Opec countries. This is when the price of Brent crude oil futures fell below $10 for the first time in its history. 
  • 2008 – The third oil shock: After an all-time high of more than $145 in July 2008, the financial crisis suddenly slowed demand and led to a plunge in Brent futures prices. 

What Influences the Price of Brent ?  

Let’s look at the main factors that can influence the price of Brent oil futures.  

1 – Supply behaves quite uniquely in the oil markets. Indeed, most oil-producing countries are gathered in OPEC, which decides on production quotas. In other words, OPEC controls supply. Therefore, OPEC’s decisions can have a significant impact on the price of Brent oil futures. 

2 – The oil demand depends mainly on the economic context. Indeed, a significant proportion of the world’s oil demand comes from cars. Car sales are particularly cyclical, which means they will be much higher during economic growth than during stagnation or recession phases. Similarly, industrial oil consumption will decline if growth, and therefore production, declines.  

3 – Many oil statistics from the economic calendar can influence Brent futures, such as the weekly US oil inventories. Therefore, traders should keep an eye on this statistic every week, knowing that an increase in inventory is a bearish factor for Brent oil futures, and vice versa. 

4 – Many oil-producing countries are located in geopolitically unstable areas, and most oil crises and shocks are related more to geopolitical events than to the economic context. Therefore, following geopolitics, especially in the Middle East, is essential when trading these futures. 

Brent Oil Futures Chart 

Let’s now study the long-term trend of Brent oil futures using the monthly chart below:  

We can clearly see that oil have recently broken above a long-term downtrend line on this Brent oil futures chart. This is an obvious bullish chart signal. In addition, Brent crude oil futures prices also managed to break above their 200-week moving average, which is also a strong buy signal.  

In summary, Brent futures appear to be in the early stages of a long-term bullish reversal phase, suggesting that now may be an ideal time to buy. 

Why Invest in Brent Futures Today? Points to Consider 

Below, we have put together some of the most important features of Brent oil futures to consider, when deciding whether or not this instrument fits your profile.  

  • Oil in general and oil futures for Brent in particular, are considered the most volatile commodity. Therefore, it is the very interesting for short-term traders and it can guarantees regular trading opportunities. However, remember that volatility works both ways and can make you money, but it can also cause you losses. 
  • Brent oil futures are often more leveraged than stocks. This means you can make big gains on small changes in Brent crude oil futures price. Again, always remember that leverage can multiply gains but also losses. 
  • Brent futures are very popular instruments for beginner traders because it is possible to trade Brent oil futures 24h a day, so they can do so in the evening after work. This allows new traders to start trading as a side hustle. 
  • The medium-term outlook for Brent crude oil futures price looks bullish, and thus is favorable from both a fundamental and technical perspective. This is an argument in favor of a long-term purchase of Brent futures. 

Where Can I Trade Brent Oil Futures?  

To trade Brent oil futures, you need to go through a broker that is reliable and regulated. ZFX is one of them, and you can open an account with this broker in a few easy steps. 

ZFX provides its clients with many benefits. For example, it offers the MT4 trading platform, the most widely used platform globally. This broker also offers many assets such as stocks, indices, forex and commodities, all at competitive fees. 

How to Trade Brent Futures Easily 

Buying Brent oil futures through ZFX is very simple and fast. Indeed, the account opening is done entirely online and takes only a few minutes. All you have to do is follow these steps. 

1 – Register with ZFX 

First, go to the ZFX broker’s website, and click on the “Open an account” button. Then, fill in the registration form with your personal details, including name, email and phone number. 

Trade Walmart - Step 1

After that, click on “Next” at the bottom of the page. Immediately after this step, ZFX will display your MT4 login and password, and invite you to download the platform. You will need these later when trading UKOIL. 

2 – Make Your First Deposit 

To do this, you will need to click on “Make a deposit” on the screen displayed immediately after registration. You will then be asked to choose a payment method. Let’s take Mastercard as an example: 

trade Facebook stock with ZFX - Step 3

On this screen you need to indicate the deposit amount and then click on “Confirm Deposit”. You will then be asked for your credit card information, before the final validation of payment. 

3 – Account Verification 

Finally, proceed with the account verification by sending supporting documents: proof of identity, proof of address and bank verification. 

trade Facebook shares with ZFX - Step 4

As shown in the image above, you’ll need to upload the documents directly to the ZFX website. 

4 – Buy UKOIL Futures 

Once your documents are validated, you can trade Brent oil futures. To do this, download the MT4 platform and login using the details you were provided in step 1. Then, search for Brent futures under UKOIL in your dashboard. Select it, and start investing as you wish. 

Things to Know Before Trading Brent Oil Futures  

In this section, we have put together essential tips to follow when trading Brent oil futures.  

  • Learn technical analysis, which is the easiest and quickest way to study assets trends and know whether to buy or sell. Whether you trade Brent futures in the short or long term, it will undoubtedly improve your performance. We therefore encourage you to get a basic education in technical analysis before trading UKOIL. The good news is that the basics of technical analysis are quick to learn. 
  • Follow Middle East geopolitics and OPEC meetings. This region is quite geopolitically unstable and has been the scene of many wars throughout history – influencing oil prices each time. Therefore, oil futures traders must closely follow political and geopolitical developments in the Middle East. 
  • Practice with a demo account to trade in real market conditions but with virtual capital. This is an ideal opportunity to train, practice, and develop your first trading methods, before you move on to the real Brent oil futures trading. 
  • Use a trading journal to record all of your trades, their context and motivation. This allows you to periodically analyze which patterns work and which ones lead to losses. You can thus update and improve your Brent oil futures trading strategy continually. 
  • Choosing a good broker is essential to succeed in trading Brent oil futures. It is vital to check that your broker is regulated and offers a quality platform, such as ZFX. 

Brent Oil Futures Forecast and Prediction 

Will the price of Brent oil futures rise or fall in the next few months or years? To answer this, this section by studying the outlook for Brent oil futures.  

Brent Futures Fundamental Analysis 

To properly analyze Brent oil futures from a fundamental point of view, we must consider the two main factors that drive the price: supply and demand.  

  • In terms of demand, forecasts suggest that Brent crude oil futures prices will fall. This is because of the global transition to clean energy, in the automobile or electricity production sectors for example. However, there are still technological challenge to address before a full transition to clean energy is possible. Thus, this total transition may not take place for several decades. So, in the meantime, the price of the futures could still rise.    
  • For supply, we’ve seen that OPEC essentially controls it. Therefore, if the commodity’s prices fall too much, OPEC will reduce production to prevent Brent futures prices from falling more. But above all, we must remember that oil reserves are not infinite. Experts even believe we have already exceed oil peak. This should have a naturally bearish impact on production.  

In the end, oil will certainly be used less and less in the future, but it will also become increasingly scarce. This mix could well lead to a very sharp rise in oil futures over the next few years, before being abandoned in the very long term.  

Brent Futures Forecast: Technical Context 

Based on the weekly Brent crude oil future chart, let’s look at the trend of oil futures.  

On this chart, the upward trend followed by Brent oil futures since the lows marked in the face of the coronavirus pandemic in March 2020 is evident. In addition, we can also see that futures brent crude oil have recently broken through long-term resistance, which is also a bullish signal. Another positive point is that the psychological threshold of $80 was recently breached.  

Based on the weekly Brent oil futures chart analysis, we can therefore say that there is a good chance that oil futures will rise in the coming months. 

Bottom Line: Should I Invest in Brent Futures Now? 

Brent oil futures are very popular instruments for both short-term and long term traders.  Looking at long-term Brent futures forecasts, both fundamental and technical analysis point to a bullish future for Brent crude oil futures price in the foreseeable future.  

If you would like to include oil futures Brent in your portfolio, you can do so easily and quickly with ZFX. With a very efficient platform and some of the lowest fees on the market, ZFX will allow you to start trading this asset and many others in the best possible conditions. 

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