Turning to today, traders will want to continue monitoring the situation in the Middle East. Any increase in rhetoric from Iran is likely to cause the price of oil to go up once again. In addition, should a bailout agreement for Greece finally be reached, riskier assets like crude oil may move up as a result.

Any further escalation in tensions between Iran and the West is likely to result in another spike in the price of oil. Furthermore, additional signs that the US economic recovery is advancing may also lead to an increase in prices. At the same time, should Greece once again fail to reach a debt-swap deal with its creditors, the euro could tumble which would likely bring oil down as a result.

Today’s meeting of euro-zone finance ministers is likely to influence the price of crude. If investors are convinced that the euro-zone can stage a meaningful recovery in the near future, risk taking will likely ensue and crude could see some bullish movement. Traders will also want to continue monitoring the state of Middle East tensions this week. Conflict in the Middle East typically leads to supply side fears which drive up the price of oil. Any escalation in the ongoing situation between Iran and the West is likely to lead to major upward movement for crude.

This week, traders will want to keep an eye on any developments in the Middle East. Further escalations in the conflict between Iran and the West will likely drive the price of oil significantly up. In addition, any news regarding the EU debt crisis is likely to influence the price of crude. The price of oil tends to rise and fall along with the euro. Should the common currency maintain its bearish trend, oil may follow.

Crude was still able to stay well above the $100 a barrel level, as continued tensions between Iran and the West kept supply side fears on investors’ minds. Today, with plenty of euro-zone news forecasted to impact the markets, traders can expect another hectic day for oil. Any increase in the value of the US dollar is likely to send the price of oil down further.

Today, traders will want to pay close attention to any news out of the Middle East, and particularly Iran. The country has recently threatened to cut off oil exports. Any further indications that they will do so will likely drive prices down further.

For instance the crude oil inventory level is released on Wednesdays, and reflects how much oil is being stored. The simplistic view is that if there are greater stocks of oil than the previous week, the price of oil will drop; conversely, if there is a shortage of oil it would seem that the price should go up. This is a general guide, and it does not always work out this way. In a similar way to how stocks and shares perform, you can find that the market has already priced in any news that is expected, and the confirmation release of data may even cause a move in the opposite direction.

When you are watching key data releases for trading hints, the dates and times are of great importance. When information is issued, there will in all probability be an effect on the market. However, some times you would be wise to let the market tell you first which way it wants to go before you trade, rather than assuming the direction.

In addition to the expected effects, there may be other factors that are realized at the same time, such as activity in other areas of the world, which overpower any price effect caused by inventory variations. It is also worth noting that gasoline supplies may increase due to a lack of demand even when crude oil quantities are falling, and this may cause a price drop.

It is accepted that total oil reserves in the world are being used up, and that further extraction, such as the oil sands projects, will be at greater expense. Nonetheless, oil companies often affect prices by their announcements about reserves, such as discovering new fields, or corrections in the quantity of oil reserves in existing fields.

Perhaps the most important and dramatic effect on oil prices is from political instability, particularly in the Middle East, which has become more prevalent in recent years. This again is often difficult to anticipate in advance, although general unrest can provide an early indication.

If trading on a longer time span, then you can take into account factors such as the general economy and seasonal factors. The recession has led to people driving less, both from losing their jobs and from an effort to cut their commuting costs by car-pooling or working from home.

The seasonal factors affecting the price of oil are fairly well-known and obvious. During the winter there is a demand for heating oil, which varies depending on how severe the weather is. Most of the oil for heating will be used in the northeast, given its climate and population density, so the weather there is particularly important. A lesser effect is the impact of a hot summer, which can affect the price in two ways. Firstly, with a “good” summer, people will tend to travel more and use more gasoline; secondly, some oil is used for electricity generation and that will be more in demand if the weather is hot and calls for air conditioning.

Futures contracts are standardized for quality and quantity, which allows them to be traded readily. The standard contracts for crude oil are for 1000 barrels, which is about 42,000 gallons, and the most common standard is the WTI, also called light sweet crude oil, with Brent crude being an alternative found more in the UK market.

While this is the traditional standard size, or “lot”, for oil, you will find dealers that allow you to trade on smaller lots. In addition, the leverage mentioned in the first paragraph means that you only have to find about one dollar for each $100 of the contract – the ratio is typically 1:100. This is called “trading on margin” – effectively you are borrowing – and liable for – the rest of the money. But in this way even a full lot of 1000 barrels can be contracted for about $1000.

However, this certainly does not mean that you should be trading oil if you only have this minimal amount. You need to understand that the price can go up or down, and your account will be charged the full difference. If your contract is losing money, it can be closed by the dealer to protect his business if you do not have sufficient funds to cover the potential loss.

As you can see, the potential profits can be enormous as long as you trade in the right direction, and this is what makes trading oil and other commodities so attractive, and worth learning about. If the price of crude oil goes up just two dollars a barrel, from $100 to $102 say, then you have made a total of $2000.

After learning more about how to identify winning trades, you need to find a commodities broker and set up an account. The broker will ask several questions about your net worth, your income, and your knowledge of trading futures, as it is in both your interests that you are financially sound and considered competent to make these trades.

When trading, you need to take care of your capital, and as a general guideline it is often considered that you should not risk losing more than 2% of the total on any individual trade. The amount you actually risk depends on the price that you are prepared to let the contract go against you, usually called the stop loss position, before you cut your losses and close the trade. In fact, you should work out this price before placing a trade, and use it to decide how large a contract you can safely take out. 2% may not sound like much, but when you have several bad trades in a row if you lose any more than that on each you will find it very difficult to even recover your original stake, let alone make a profit.