Oil Trading Explained: What Today's Price Swing Means for CFD Traders
Oil prices fell more than 1% on Thursday, with Brent crude down to around $87.51 a barrel and US WTI crude down to around $82, as weaker global demand forecasts outweighed ongoing supply concerns from the Strait of Hormuz, according to reporting citing OPEC and International Energy Agency (IEA) data. It's a reminder of how quickly sentiment can shift in the oil market - Brent had still finished the week roughly 5% higher, even after Thursday's fall, according to Trading Economics.
This guide explains what's actually moving oil prices right now, how retail traders access the oil market - including via CFDs (Contracts for Difference) - and the risk-management basics worth understanding before trading a commodity this volatile.
Key takeaway
- Brent crude fell to around $87.51 a barrel and WTI to around $82 on Thursday, as OPEC and the IEA cut their 2026 global demand forecasts.
- US crude inventories jumped by 17.4 million barrels last week - their largest weekly increase since January 2023 - adding to the demand-side pressure on prices.
- Despite Thursday's fall, Brent remained roughly 5% higher for the week, reflecting the ongoing supply-side risk premium from Strait of Hormuz disruption.
- Oil is typically traded by retail traders via CFDs, futures or options - each with a different risk and cost profile.
- Losses can exceed your initial deposit when trading with leverage, and 69% of retail investor accounts lose money trading spread bets and CFDs with this provider.
Why Oil Prices Moved Today
The oil market is currently being pulled in two directions at once. On one side, OPEC cut its 2026 global oil demand growth forecast to 580,000 barrels per day - its fourth consecutive downward revision - while the IEA turned more bearish still, forecasting global oil consumption will contract this year, according to Trading Economics reporting on 13 August 2026. US crude inventories also jumped by 17.4 million barrels in the latest week, the largest increase since January 2023.
On the other side, the unresolved conflict around the Strait of Hormuz continues to threaten supply. The US has estimated that as much as 9 million barrels of oil per day are still transiting the waterway despite the disruption, and some tankers have reportedly been sailing with transponders switched off, though vessels navigating Hormuz remain exposed to persistent threats. For now, demand-side concerns appear to have the upper hand, but traders remain highly sensitive to any shift in the diplomatic picture, according to Trading Economics.
As with any fast-moving commodity story, exact prices vary by source and by the moment a quote is taken - some trackers had Brent nearer $90.28 a barrel earlier the same morning before the afternoon decline, and WTI has been quoted as low as $81 and as high as $82 across different reports on the same day. Traders should always check a live quote rather than relying on a single article for a dealing decision.
~$87.51/bbl
Brent crude
~$82/bbl
WTI crude
+17.4m barrels
US inventory build
How Oil Trading Works
Brent Crude vs WTI
Oil is priced using two main global benchmarks. Brent crude, sourced from the North Sea, is the more widely used reference for pricing oil traded internationally, including much of the crude that moves through the Strait of Hormuz. West Texas Intermediate (WTI) is the main US benchmark. The two usually trade within a few dollars of each other, but that gap can widen during a regional supply event - as it has during the current Hormuz-related disruption, since Brent is more directly exposed to Middle East supply than US domestic production.
Trading Oil via CFDs
A CFD (Contract for Difference) lets a trader speculate on the price of oil rising or falling, without owning the physical commodity. CFDs use leverage, meaning a trader puts up a fraction of the full position value as margin. This magnifies potential gains, but it equally magnifies potential losses. Losses can exceed your initial deposit when trading with leverage.
Trading Oil via Futures and Options
Oil is also traded directly via futures contracts - standardised agreements to buy or sell oil at a set price on a future date - and via options, which give the right, but not the obligation, to trade at a set price. Both are typically used by more experienced traders and carry their own distinct risk profiles compared with CFDs.
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What's Driving Volatility in the Oil Market Right Now
OPEC+ supply decisions: OPEC's demand forecast has now been revised down for four consecutive months, according to Trading Economics.
Demand data: the IEA's more bearish 2026 consumption forecast and a record weekly US inventory build both point to softer near-term demand.
Geopolitical risk: continued disruption to Strait of Hormuz shipping keeps a supply-side risk premium in place, even as demand concerns dominate day to day.
Diplomatic developments: any credible progress toward reopening the strait, or a further escalation, has historically moved oil prices sharply in either direction this year.
Past performance is not a reliable indicator of future results.
Managing Risk When Trading a Volatile Commodity
Given oil's current volatility, risk management is worth particular attention. A stop-loss order automatically closes a position if the price moves against a trader beyond a set level, helping to limit - though not eliminate - potential losses. Position sizing (trading a smaller position relative to account size) is another common way traders manage exposure to a fast-moving market. Leverage means losses can exceed your initial deposit, and no risk-management tool removes that risk entirely.
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FAQ
Is oil a good commodity to trade?
Oil is one of the most actively traded commodities globally, offering high liquidity, but it's also prone to sharp volatility driven by supply, demand and geopolitical factors - as this week's price swings show. Whether it suits a particular trader depends on their risk tolerance and experience; this is informational content, not a recommendation.
What moves the oil price?
The oil price is primarily driven by OPEC+ production decisions, demand forecasts from bodies like the IEA, weekly US inventory data, and geopolitical events affecting major producing or shipping regions - such as the current Strait of Hormuz disruption.
Can you trade oil overnight?
Oil CFD markets typically offer extended trading hours covering most of the day and night, though exact hours vary by provider and contract - check the specific market hours before placing a trade.
What's the difference between Brent and WTI crude?
Brent is the international benchmark, sourced from the North Sea and more exposed to Middle East and European supply dynamics. WTI is the US benchmark, more closely tied to US domestic production and inventory levels. The two typically trade within a few dollars of each other but can diverge during regional supply disruptions.
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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