5 Methods of Crude Oil Trading: From CFDs to Stocks - A Detailed Guide for Investors 2025

In 2025, the global energy market will experience notable fluctuations. Understanding the two main crude oil benchmarks—WTI and Brent—along with suitable trading methods, is key for investors to seize profit opportunities in the crude oil market.

Differences Between WTI and Brent: Key Points to Know

On the global market, over 160 types of crude oil are traded, but only two are considered main standards: West Texas Intermediate (WTI) and Brent Crude Oil.

What Is WTI Crude Oil? (

WTI oil is extracted from inland fields in the United States. Its prominent features are light, sweet, and easy to refine into motor fuel. However, because it relies on pipeline systems for transportation, WTI’s logistics costs are relatively high compared to Brent.

On reputable forex trading platforms:

• USOil = WTI futures contract
• USOilSpot = WTI spot contract

) What Is Brent Crude Oil? ###

Brent is extracted from oil fields in the North Sea, Northern Europe, characterized by lightness and ease of processing. Its biggest advantage is easy maritime transportation, which reduces transaction costs and expands the market.

Currently, about two-thirds of global oil contracts reference Brent prices, making it the most widely used benchmark worldwide.

Trading symbols:

• UKOil = Brent futures contract
• UKOilSpot = Brent spot contract

Although WTI has higher quality, Brent prices are often higher due to greater trading demand.

Historical Crude Oil Prices from Past to Present

Crude oil has long been considered a strategic resource for nations. Under the gold standard system, oil prices remained stable at around 2-3 USD per barrel for decades.

The Fourth Middle East War in 1973 marked a turning point. When OPEC was formed to counter Western oil corporations (“Seven Sisters”), oil prices surged, reaching about 30 USD per barrel by 1985.

In 1986, when Arab countries lifted production limits, oil prices plummeted from 30 USD to 10 USD per barrel. In the following period, oil prices fluctuated between 10-30 USD for nearly two decades.

The September 11, 2001 event triggered a global strategic oil stockpiling wave, combined with Middle East conflicts reducing extraction. As a result, oil prices hit a record high of 147 USD per barrel in 2008.

This record high encouraged investment in shale oil extraction technology (shale oil), increasing supply and driving prices down. In 2015, the Obama administration authorized crude oil exports to balance excess production.

In 2020, the COVID-19 pandemic sharply reduced transportation demand, causing oil prices to fall dramatically. In subsequent years, the Ukraine-Russia conflict (2022) and other geopolitical factors impacted the market.

By the end of 2024, Brent closed at 74.6 USD per barrel, down about 3% for the year due to supply-demand pressures and OPEC’s production adjustment activities.

Current Factors Influencing Crude Oil Prices

Four main factors impact Brent and WTI prices:

1. Supply and demand in the spot market (spot market)
2. Global oil reserves levels
3. Complex geopolitical developments, especially in the Middle East
4. Investor sentiment and OPEC+ policy decisions

In the short term, oil prices are heavily influenced by OPEC+ meetings, US oil inventory data, China’s economic recovery progress, and tensions in the Middle East region.

Crude Oil Price Outlook for 2025

The Brent price trend in 2025 is expected to go through three phases: “initial decline, mid-year rise, then decline again.”

Early 2025, under the pressure of a weakening global economy, oil prices will continue to decline, reaching a low below 63 USD per barrel in early April— the lowest in nearly two years. In May, investment oil prices stabilize in the 64-66 USD range.

Mid-year, escalating conflicts in the Middle East (especially Israel’s airstrikes on Iran in June) caused oil prices to jump over 10%, surpassing 73 USD per barrel. However, as fears of conflict escalation eased, prices fell back to the 67-69 USD range.

Second half outlook, if geopolitical tensions ease and OPEC+ increases production, the International Energy Agency (IEA) forecasts Brent could weaken, with an average year-end price around 61 USD per barrel.

5 Effective Ways to Invest in Crude Oil

( Method 1: Trading Crude Oil via CFD

CFD )Contract for Difference### is the simplest tool to participate in the crude oil market. It functions like a certificate of crude oil, with the CFD price reflecting the standard oil price (WTI or Brent).

Example: If WTI is at 75 USD per barrel and you believe it will rise, buy a WTI CFD. When the price increases, sell the CFD to realize profit.

Advantages of CFDs:

• Leverage: only require 1-5% margin of the trade value
• Short selling: profit from falling oil prices
• Low capital requirement, high flexibility

( Method 2: Futures Contracts )Futures###

Futures are tools for professional investors with large capital. They allow buying and selling crude oil at a specific future date at an agreed price.

Features:

• Large trading volume (minimum 10,000 barrels per contract)
• Suitable for institutional investors
• Higher transaction costs than CFDs

( Method 3: Oil ETFs

ETFs are diversified investment baskets that help reduce risks compared to direct trading. They tend to have lower price volatility and can be bought and sold like regular stocks.

Notable oil-based ETFs:

• Vanguard Energy ETF )VDE###
• VanEck Vectors Oil Services ETF (OIH)
• United States Oil Fund (USO)

( Method 4: Master Limited Partnerships )MLPs###

MLPs allow direct investment in oil and gas companies in the form of limited partnerships. Investors become partners with profit-sharing rights without decision-making authority.

Popular MLPs:

• Energy Partners (EPD)
• Western Gas Partners (WES)
• Marathon Petroleum (MPLX)

( Method 5: Oil Company Stocks

This is the most indirect form. The stock prices of oil exploration companies are highly correlated with crude oil prices.

Favored oil stocks:

• Sinopec
• ExxonMobil
• Royal Dutch Shell
• BP
• Total SA

) Comparison Table of 5 Crude Oil Investment Methods

Conclusion: For small capital, CFD is the most optimal choice. For larger capital and high risk appetite, futures or oil company stocks are more suitable.

5 Tips for Successful Crude Oil Trading

1. Understand the 4 Main Factors

US and OPEC production levels, shale oil reserves, US dollar fluctuations, and global demand are decisive factors. When these four factors align positively, oil prices will break out.

2. Follow Daily News

The crude oil market often moves based on information rather than actual conditions. To avoid being swept by herd mentality, regularly check news from reliable sources like the US Energy Information Administration ###EIA###.

( 3. Carefully Compare Brent and WTI

The two oils are extracted from different regions with distinct influencing factors. Mastering the basic differences will help forecast prices more accurately.

) 4. Analyze Historical Price Patterns

“History repeats itself” — regularly compare current price models with past data to make precise trading decisions.

5. Choose Reputable Tools and Brokers

Selecting trading tools suitable for your financial capacity and risk appetite is the final but extremely important factor to avoid heavy losses.

Conclusion: Investment Opportunities in Crude Oil in 2025

Crude oil remains a popular financial trading instrument after decades. 2025 offers new opportunities for savvy investors with five diverse investment methods—from simple CFDs to complex futures.

If you are a new investor with limited capital but willing to accept high risks for high returns, trading crude oil via CFD will be the optimal choice in 2025. The key is always risk management, closely monitoring the market, and adhering to your trading strategy.