There has been a lot of attention paid to the crude oil market in recent months, and with good reason – it has enjoyed a most extraordinary rise, and the dynamic nature of the market has meant that crude oil futures have presented enormous opportunities for the active trader to make a killing.  The leverage of their funds with a dynamic market is the reason that so many traders who are prepared to do their homework are attracted to the prospect.

To be sure, trading in futures is a two sided coin, and if one trader wins big, then another speculator may have suffered a large loss in the same contract. This is the nature of the beast in futures trading.  Crude oil futures in particular have experienced such dramatic performance that those who did not believe their analyses would still be left at the starting gate. Even now, investment banking giant Goldman Sachs is predicting that the cost of a barrel of oil will be $141 for the second half of the year, and over $200 per barrel in the next two years is considered realistic by many commentators.

So the opportunities that have been presented recently in futures trading on the crude oil market have already been exceptional, and it looks as though oil is not going to quieten down anytime soon. The key is in making the correct trades for maximum profit, and this is where diligence and forethought will pay off. There are many competing pressures on oil prices, and that is why so many people are prepared to put their money where their thoughts are, and make crude oil futures an active marketplace.

Surely, you might say, prices will continue to go upwards at a steady pace as the world realizes that the demand for oil is increasing more rapidly than the supply. While there is some truth in this, it is a very simplistic picture of what drives the market for oil. The developing countries where industrialization is taking hold as they race to compete with the western world are multiplying their use of oil. For instance, in Beijing, China, there are an additional 14,000 vehicles added to the roads each day. Almost by tradition, you can expect the OPEC countries to resist any call to increase their output, although they sometimes make a conciliatory gesture, such as Saudi Arabia increasing their daily output by 300,000 barrels a couple of weeks ago. However, OPEC in its May market report says that world demand will rise by 1.16 million barrels per day.

On the other hand, oil has already enjoyed an amazing run, and when everyone thinks the bull run will go on without stopping, it is perhaps time to step back, take profits and ride out the consolidation. The recent $135.09 per barrel record has been blamed on traders covering their short positions – it’s one of those anomalies of the system that every time someone goes short, betting on a price reduction, it guarantees that there will be a demand to buy the stock later. Look for a temporary pullback in the month to come.

Crude oil futures are probably the most actively traded commodity in the world, and present significant opportunities for traders. If you yearn for excitement, come and join the roller coaster ride and test your judgment against the world!