Understanding oil trading is crucial because it has become one of the most traded commodities on the global market. Additionally, oil is also frequently used as the world’s economic health barometer as it more accurately reflects the state of the global economies. The prominence of the oil market has made oil trading more accessible and continuous as 3 major oil trading hubs are strategically located in the US, Europe, and Asia thereby enabling transactions to be completed from Monday to Friday practically 24 hours a day, which is crucial when considering oil price volatility.
Here’s everything you need to know about the international oil trading business, particularly with regard to refined oil products.
Winson Oil On International Oil Trading [Infographic]
Trading refined oil products
Oil trading in its most simplistic form involves purchasing and selling various forms of physical oil and oil-linked assets, arranging for the logistics such as transportation and in some cases, storage for a period of time, before delivering them to the location where they are needed, thereby striking a balance between supply and demand, and at the same time, turning a profit for the trader (if everything goes according to plan). Oil being a limited natural resource, changes in geopolitical forces, weather, and regulations can affect regional short-term supply and demand disruptions that can cause significant price fluctuation which can seriously affect a trader’s bottom line. To manage such price fluctuation, one very often turns to the use of oil derivatives, such as oil CFDs, which typically involve buying or selling a futures contract for a specified quantity of oil for a price agreed upon today with a future delivery date.
Let’s look at some of the refined oil products that are mostly traded internationally.
- Marine Gas Oil (MGO)
Among refined oil products, marine gas oil is one of the most preferred clean fuels used on ships. It is composed of various blends of distillates. Distillates are crude oil’s evaporated components, which are condensed from a gaseous form to a liquid condition during the distillation process. Therefore, MGO does not require heated storage, so the money will be saved on the installation and maintenance of already-in-service ships and new ships.
MGO can be clear or transparent, however, under some conditions, it is tinted yellow or red to make it easier to spot when it is being replaced by less expensive heating oil. Marine gas oil is a top choice in the shipping industry because it has a lower percentage of heavy fuel. This means that it releases much less soot and particles into the air.
- Jet Fuel
Jet fuel is a specialized synthetic oil utilized in high-performance jet engines and is the third-most significant form of fuel for transportation. It is a middle-distillate product that is utilized mostly in commercial airplanes. Freeze point, flash point, and smoke point are some of the essential characteristics of jet oil, and commercial jet oil has a boiling point range of roughly 190-275°C.
Gasoline is one of the more expensive light products made from crude oil and other petroleum liquids and is one of the key oil products that is frequently consumed all over the world. Motor gasoline is produced at petroleum refineries and blending facilities, and is sold at retail gas stations. Almost everywhere in the world, gasoline is primarily used as an engine fuel in cars and in other light-duty vehicles.
About Winson Oil on International Oil Trading
The Winson Oil trading company is situated in Singapore – which is the third-biggest oil trading hub in the world and the largest oil trading hub in Asia. Our team of highly skilled oil traders is in constant communication with both buyers and sellers, understanding each party’s different needs and finding solutions to meet their fuel requirements.
With a total trade tonnage of over 11 million MT, Winson Oil’s trading business focuses on gasoil and has established a strong presence in the local and regional markets. Due to the long-standing partnerships with major oil refineries, Winson Oil is able to quickly strategize in order to provide its customers with the greatest oil supply and trading service. Winson Oil, which has a thorough understanding of the industry, has expanded its worldwide trading operations to include refined oil items such as gas oil and jet oil. In order to reduce its exposure to oil price volatility, Winson Oil has a strong risk management structure in place and hedges its physical oil stock. This is also a great way to help the Global Marine Bunkering business and to ensure that the stability of the earnings is not impacted by fluctuating oil prices.
To learn more about our international oil trading sector, visit Winson Oil on international oil trading