| Oil is the major driver of global economy. Transport is | | | | pain of high oil prices. Transport came to a grinding |
| impossible without oil. Aeroplanes and ships cannot | | | | halt. People started looking for alternates. Alternative |
| move without oil. Imagine a world without a very | | | | energy resources became highly popular. More and |
| small supply of oil and high demand. There is a Peak | | | | more money is being pumped into alternative energy |
| Oil Theory that says that all major oil reserviors have | | | | technologies as never before. The prices have come |
| been discovered. We are now sitting on a depleting | | | | down for the time being due to the global recession |
| reservior of oil that is going to decrese faster and | | | | that started in 2008. With the end of this recession, |
| faster with the passage of time. Just imagine when | | | | demand is going to pick up again and we will again |
| something is in high demand but the supply is limited | | | | see crude oil in range of $150-$200 per barrel. |
| or negligible. Yes, it can lead us to the era of sky high | | | | As a trader, you must be cognizant of this fact. We |
| oil prices until and unless the world finds a cheap | | | | traders always try to profit from a trend that might |
| substitute. With more and more countries like China | | | | last for many months. Once an uptrend starts in the |
| and India developing, the demand of oil will skyrocket | | | | crude oil prices, it may last for several months to |
| while the other hand the supply will keep on dwindling | | | | years. Those savvy traders who can position |
| and decreasing. | | | | themselves for trading crude oil in 2010 are going to |
| Now, the economics of oil prices is simple. With more | | | | reap huge profits. |
| demand and a finite dwindling supply that is being | | | | The best way to trade crude oil is to trade crude oil |
| exhausted with the passage of time, the world is | | | | futures contracts that get traded at NYMEX (New |
| going to see the end of oil in the coming two to | | | | York Mercantile Exchange). New to futures trading, |
| three decades. Rising demand and decreasing supply | | | | don't worry. If you have been trading forex or |
| will push oil prices in the range of $200 in the coming | | | | stocks before, you can learn futures trading in a few |
| years. | | | | months time. Just practice on your demo account |
| We saw a manifestation of this phenomenon, when | | | | and paper trade as much as possible on it for a few |
| in the summer of 2008, suddenly crude oil prices | | | | weeks to a month to become familiar with futures |
| jumped from around $60 per barrel to around $150 in | | | | trading in order to start profiting from the rising oil |
| just a matter of months. The whole world felt the | | | | prices in 2010! |