Oil is the new gold. This phrase is a testament to the market value of this commodity in a world where all economies remain interconnected. As the presence of oil grows and the demand for it increases, so does the price paid by eager buyers. It is not enough, however, to just buy up oil in times of plenty. An essential aspect of oil trading involves looking for opportunities in moments of destabilization and conflict. As the saying goes, “buy when there’s blood in the streets”.
Although this phrase may sound crass, it captures the reality of trading in oil. To succeed, one must not only look for opportunities in moments of stability, but also be brave enough to recognize opportunities for trading in moments of chaos. The idea of taking advantage of destablization is not a new one. It has been employed successfully in multiple industries for centuries.
This strategy is based upon the concept of ‘buy low, sell high’. In moments of conflict and destablization, prices tend to be lower due to the resulting fear and uncertainity. When prices are low, smart investors buy, knowing that the market will eventually stabilize, and their investments will appreciate.
In terms of oil trading, this strategy has historically proven to be highly lucrative. In times of conflict and even war, oil supply can be disrupted, resulting in a shortage of fuel and often a subsequent spike in prices as demand increases. When this happens, those who had the foresight to invest in the commodity when prices were low often reap large rewards.
Of course, this strategy can backfire terribly if carried out ignorantly and in haste. Ships laden with barrels of oil can be sunk in transit if their safe passage cannot be ensured, resulting in a total loss. It is therefore of paramount importance for those who would like to engage in oil trading to study the current geopolitical landscape and assess any associated risks before committing to any investment.
In conclusion, oil is the new gold. Its market value has grown substantially in recent years, providing entrepreurs with many opportunities for trading. When assessing where to place their funds, successful traders look at times of destablization and disruption and take advantage of lower prices in order to reap larger rewards when the market normalizes. Nevertheless, they must always take risks into account when deciding to invest their capital and assess the viability of any business venture before committing to it.
