Oil Continues to Go High And What Should Brokers Do: Valutrades CEO Graeme Watkins Speaks

BrokersView Exclusive Interview… BrokersView is honored to have the CEO at Valutrades, a multi-regulated and UK-based brokerage, to join us today. As a veteran in the industry, Mr. Graeme Watkins is here to share his opinions on the development of oil markets and how brokers should do as the oil continues to go high.

BrokersView: What the oil market is telling investors today, what investors can read from various price signals?

Graeme: In the short term rapidly increasing oil prices are providing an opportunity for speculators trading the market where many holding long positions have been able to make healthy profits however this is masking much bigger systemic problems that an increasing oil price can cause the world economy. Undoubtably higher oil prices will drive a wave of persistently higher inflation, causing central banks to increase interest rates faster and higher than expected which risks pushing the global economy into a sustained recession.

BrokersView: Considering Russia-Ukraine war impacts, will oil prices heading higher? Does the blistering rally continue? Should investors get in to the oil markets now?

Graeme: The oil markets are clearly very volatile which can present many opportunities to traders. Both short term scalping strategies and long term long only strategies are performing well and may well do so for the foreseeable future. There are also more peripheral opportunities to consider like the positive effects  on shares in oil producing companies or the negative effect on stock indexes of countries that are large oil importers.

BrokersView: How Russia’s war on Ukraine could impact Fed policy?

Graeme: This is a really big unknown as usually in times of conflict the Fed would act to support and stimulate the economy however since the Covid pandemic the Fed has already deployed 0% interest rates and quantitive easing so there is not much more stimulation they can do. The Fed is also worried about high inflation and will need to increase interest rates to fight inflation. Most likely the conflict will slow the rate increases but only marginally.

BrokersView: Where oil and energy stocks are headed from here?

Graeme: It is impossible to predict the future however 10 to 20 years of under investment in the energy and commodities sector suggests that long term investment and supply constraints will keep the industry in a positive position for years to come.

BrokersView: During periods of such volatility in the marketplace, how to ensure that traders are getting the best execution price, speed, and liquidity?

Graeme: It is critical that in times of volatility traders are only working with brokers that have shown a history of positive reputation and reliable technology. This means that even when the price is volatile the broker will continue to support the clients best interest providing and reliable trading experience and support where it is needed.

BrokersView: Any trading restrictions for limit order now?

Graeme: Valutrades has not imposed any limits or restrictions in oil trading. All clients of Valutrades are enjoying tight spreads, good execution, high leverage and negative balance protection including on all oil products UKOilCash, UKOilFutures, USOilCash, USOilFutures and Natural Gas.