[00:00] People who don't have time to trade in Indian equity markets like Nifty or Bank Nifty And in commodity markets do you know what is traded most? The element that trades the most in the commodity markets is crude oil.
[00:17] In the stock market, listed companies like Reliance, ONGC, BPCL, HPCL, IOC, paint companies, tire companies, pipes companies, even textile companies, companies in various sectors, use crude oil as an important material.
[00:31] In fact, traders also don't work like this if the support breaks, resistance breaks, buy and sell. It doesn't move with demand and supply.
[00:43] if you don't understand those factors and go into trading, the probability of getting trapped is higher than the probability of success. you will know why crude oil moved like this.
[00:57] If you have an idea of the reasons why crude oil is increasing and decreasing, Even when you play in stocks related to it, particularly, if you want to invest in short term or months part and earn money,
[01:09] if you understand how these stocks will be impacted by the movement of crude oil, So, listen carefully to the topic of crude oil that we are going to talk about today. If you have any doubts, try to note the topics related to this in a book.
[01:24] In today's video, we will talk about crude oil. I will explain the important things that you should know in that. In trading, we should first know how to trade crude oil in futures and options.
[01:39] Is it enough to observe just the crude oil chart? Not only trading, if you want to invest in stocks in short term, there are some particular important factors,
[01:54] the crude oil will move a lot with those updates. If you can guess the outcome of those events correctly, The impact of crude oil on any stocks or sectors.
[02:14] if you are a person who wants to support such unpopular topics, and even such content, If you want to support such content,
[02:30] definitely like the video and try to encourage our efforts. What is crude oil? It is the raw material that was formed in the process of creation of the earth.
[02:46] It is a very raw material. I can neither use it as petrol nor as diesel. and then refine it.
[02:59] If we process the particles and unnecessary things in it, Some of them are petrol and diesel. But the most important thing is that
[03:13] when we don't have any of these vehicles, Whether we have it or not, we don't use it. But when the development and the use of crude oil products started globally,
[03:27] Particularly, in India, crude oil prices play a very important role in petrol and diesel. the petrol and diesel rates in India are increasing. So, such crude oil is available in India.
[03:43] But what we get in India is lower than what we import from other countries. The brown color is the production of crude oil in India. So, clearly we have to extract crude oil from other countries.
[03:59] You can see it on the screen. US, Saudi, Russia, Iraq, Canada, Iran, Kuwait, UAE. So, you can see on the screen how many countries are producing oil.
[04:15] Then, the countries that use more crude oil. Yes, USA produces and exports more. After USA, China, Japan, India.
[04:29] In the world, these countries use more crude oil. Look at the screen. The place where crude oil is extracted
[04:42] has to process it, transport it and refine it. or from the place where it is produced? It is not enough to extract it.
[04:57] They are called midstream companies. Downstream companies refine the processed crude oil
[05:09] and then supply the products that are made from it. In this, we have HPCL, BPCL, IOC and Reliance. Diesel and Petrol.
[05:21] we get many products at different temperatures. You can see the products and where they will be used on the screen. related to the stock market
[05:36] We will discuss this later in this video. We get different products. A branch of products are formed from it.
[05:51] in the cosmetics used, a material in the byproducts related to crude oil is mixed.
[06:03] Is crude oil the same? Are there any types in it? There are WTI crude oil, Brent crude oil, Are these not the same?
[06:16] Friends, if the proportion of the materials mixed in these changes, some crude oils have more density, so, if there are more impurities in them,
[06:29] the transportation and refining cost of those will be more. and get petrol and diesel from them. So, depending upon these variations,
[06:42] and even as Dubai related crude oils. We observe both of them. Because, there is no need to read all of them.
[06:57] Okay, tell me this. What is the relation between them? West Texas Intermediate.
[07:10] Means, these types of crude oils are formed in Louisiana, North Dakota, So, it got the name WTI. Friends, in the last video, I told you about a formula in gold trading.
[07:24] we talked about gold previously. If we want to know the price of Indian crude oil, What did we talk about tracking earlier?
[07:39] What do we see? So, what is the price of WTI in terms of dollars, Means, how many rupees is equal to a dollar?
[07:52] we get the Indian crude oil trading price. the important elements we should observe are, Means, WTI is the price of US oil.
[08:06] You can see this in investing.com, So, if you type WTI crude, So, let's go to the last video formula.
[08:21] According to our formula, how many rupees are coming in a dollar? So, 1 dollar equal to 81 rupees 25 paise,
[08:35] 6500. No, it's a barrel crude oil price. Then, how many liters are there in a barrel?
[08:50] So, there a 6500 that multiplies like that is around 6462. And, we should talk about another important thing.
[09:04] it opens around 3 in the morning, But, our commodity markets, So, even after our markets close,
[09:19] till 2 o'clock, So, after our crude oil price closes, that morning, we will have a gap up or gap down.
[09:33] Before the market opens, Because of the news, updates, results that are coming with stocks, But, how will we have a gap down or gap up?
[09:45] And, the buyers and sellers will already have an idea, because of placing buy orders and sell orders in that price range, The crude oil price that we trade in India, in MCX,
[10:01] will be linked to the global WTI crude oil price. whatever crude oil price you see as US or WTI related, a barrel is equal to 159 liters.
[10:17] Because, if we multiply it all, it will be 6500. After this, Means, if we compare it to the dollar,
[10:31] What does it mean to become weak? what does it mean to become weak? Observe it like this.
[10:43] If we get a dollar for 80 rupees, we are getting only one dollar at higher price? If rupee becomes strong,
[10:56] if we keep 79 or 78 rupees, what will be the impact on crude oil? The same concept applies here too.
[11:09] like if rupee becomes weak as 1 dollar equals 80, 81, 82, 83, How do you say that rupee becomes weak and price of crude oil rises?
[11:22] Our Indian price is equal to commodity price multiplied by 1 dollar. If 1 dollar equals 81, 82, 83, then Indian commodity price will rise.
[11:37] if the price of crude oil falls in dollars, or if 1 dollar equals 80, 81 becomes stronger, if rupee becomes strong like 75, 70, 65,
[11:52] We have heard that it is directly proportional. Commodity price and rupee strength and weakness are directly proportional to MCX price. This is also known to those who watched the last video.
[12:08] If I keep referring to the concepts I talked about there, So, dollar index is an index to measure dollar strength. commodity price trading with dollar will become weak.
[12:25] Now, recently, dollar index is falling. then how did the global crude oil price and Indian crude oil price react? This is a 4-hour chart.
[12:39] Observe at the same time. Global US crude oil or WTI crude oil has moved to the upside. Indian crude oil related to it has also moved to the upside.
[12:55] If dollar index is increasing, commodities will fall. So, we should always remember the basic and fundamental formula. the commodity price in US
[13:09] multiplied by 1 dollar equals to how much rupees? you will understand the logic related to most of the commodities. if you can understand the logic of dollar index,
[13:21] Friends, now, let's talk about the futures and options related to crude oil If you search crude oil in your trading terminal, Note that, you will have the availability of futures till June.
[13:38] Means, you can hold futures related to crude oil for the next 6 months. First, let's talk about futures and then we will go to options. So, I have added Feb and Jan futures.
[13:53] Note that, while I am trying to buy futures related to February, And, how much are they asking for a lot? This is trading at Rs.6,491.
[14:06] One lot is equal to 100 barrels. So, 100 multiplied by 159 liters. We don't use it for trading to hold liters.
[14:21] If we calculate the barrel equal to 6,500, Regarding the February contract. So, if we see the price of a barrel while trading,
[14:33] So, the size of the contract is multiplied by the lot size here. So, the size of the contract is 6,49,000 or 6,50,000.
[14:48] if we want to hold it positionally, And, to trade it, you have to spend Rs.57. Stand duty is Rs.12.
[15:03] If you add up all these, you have to pay Rs.57 in charges. So, it is near 6,491. we will get Rs.900.
[15:18] So, we will get Rs.100 for each point. But, one lot is equal to 100 barrels. So, we will get Rs.100 change for each point in our profit and loss.
[15:33] Options are related to Nifty and Bank Nifty. we have to multiply the price by 100. If we do that, we can buy it if we put Rs.32,120.
[15:47] like Nifty and Bank Nifty options, we have to ask for the requirement to buy and sell as much as possible for the future. Hope you understood the futures and options, lot size,
[15:59] and how much margin or money we have to provide for that. Now, on what basis should we trade this? most of the people track these two things.
[16:12] How are the global economy conditions? Like, there will be global weakness in the upcoming times. Let's talk about all these.
[16:25] If the economy is weak and crude oil consumption is decreasing, Or, resistance has been rejected or support has been broken. Let's talk about the technical elements.
[16:40] Exactly, you will be following the price action related to stocks, bank nifty, nifty. In fact, the price action is better than that. Because, there is less probability of speculations.
[16:55] will be related to the global crude oil price. Even, the global crude oil price will be linked to the currency. So, it is not easy to bring the big gap with the global markets in Indian markets.
[17:11] a channel and its breakout. the exact line, the resistance line, Since then, we have had multiple times resistance, support, resistance, resistance.
[17:28] we are facing resistance again. Once it faces resistance here, again, fall, resistance, fall resistance.
[17:42] scenarios where price action is respected in the communities. Crude oil price action is moving according to the global price action. You said that people from here are not controlling.
[17:54] But, support and resistance here, You take WTI Crude Oil chart, At the exact levels,
[18:07] support and resistance is seen in the Indian equity markets related MCX prices. Because, it is not just the global crude oil price, There will be a little variation.
[18:21] So, should we look at Indian MCX price or WTI Crude Oil? I believe that we should look at WTI Crude Oil price. no one can stop Indian Crude Oil price tfrom upside.
[18:38] when we take a trade, see, Wednesday, November 9th, here we have a downside,
[18:51] Exactly, there too, the channel in WTI Crude Oil broke down. Crude Oil price broke down in WTI Crude Oil,
[19:04] Here too, after the opening of Indian MCX price, in our Indian charts, it is better to look at the breakdown and set a stop loss target related to this.
[19:19] is it the candle above or the channel above, I use these. I did not set the stop loss target on the basis of WTI Crude Oil.
[19:33] previously what support it had, how much will it move, for entry, stop loss, target levels, so I suggest the same.
[19:46] how much stop loss, target, So, looking at the price action and taking the view, and for the M6 prices here,
[20:00] You understood how to do the trading, And friends, before continuing the video, We do not promote any of your cryptos, betting apps,
[20:14] the referral links to our channel are in the description comment section. term insurance, health insurance, the referral links to our channel policy bazaar are in the description comment section.
[20:30] even when you are opening a D-mat account. by using our channel referral links, If you think our work and efforts are valuable,
[20:42] instead of going to direct websites in the future, This is important. What factors will impact crude oil prices?
[20:54] Let's talk about this. Countries that produce crude oil, if there is more production and normal consumption, the prices will fall.
[21:06] If there is more demand and consumption, the prices will increase. Because production and consumption will change over the period. Because of that, prices don't move.
[21:20] The reason for the price to be like this. If anyone wants to destroy an economy, if they want to destroy their economy,
[21:34] if they show any impact to their oil refining or refining, then their economy and crude oil prices will be affected. Like the attack on Saudi oil refineries by drones.
[21:50] The main reason is to impact the economy and the country there. Because if the refineries there are impacted, If the refineries are impacted,
[22:04] With the concern that supply will decrease, whenever there is an attack on the refineries related to crude oil, So, you must have heard of the word attack and sanctions.
[22:17] the European imposed sanctions on Russia, If you imposed sanctions on me, You and the countries you like should not deal with me.
[22:30] you imposed sanctions on me. we will keep your friend countries aside, But if someone is talking to you and buying crude oil from me,
[22:47] I will be impacted by the economy, But, the people who are buying crude oil from me, then the prices of crude oil will increase globally.
[23:02] And this is the most important thing. can be considered as a cartel. if 5 people are a group,
[23:17] They can only make sweets. They can only make sweets. since we have the oil, no one else has it,
[23:31] OPEC people can control the price of oil as they like. which countries are in OPEC. After the OPEC meeting is decided,
[23:44] We even talk about it in our news videos. Is there more supply or less supply? they will think of increasing the supply and earning money.
[23:58] if we increase the supply, If the supply is increasing, the price of crude oil will increase.
[24:11] then the price of crude oil will increase. If you hear the word increase in supply in OPEC meeting, Even OPEC plus meetings are happening,
[24:24] Supply is increased, price will fall. This is every week, Wednesday 8 pm around. Inventory data, we usually see about US.
[24:39] It is being traded as Indian MCX price as reference. Every week, Wednesday 8 pm is released. So, it tells us the inventory week to week.
[24:54] What is the raw material of inventory? If the inventory of 10 kgs of gold is reduced to 1 kgs,
[25:07] and make jewelry and sell it. it means your sales and business has increased. If your inventory is the same,
[25:19] Similarly, if the stock of crude oil is reduced it means the demand for crude oil is high globally. When the inventory data is low, the price of crude oil increases.
[25:33] But, if the inventory data is high, the price of crude oil has increased.
[25:45] It means there is no demand for crude oil. I shared an image of stock market basics 13 days back. In this image, inventory is not about price increase or decrease.
[26:01] Based on that expectation, and how the price of crude oil will change. When the virus came, the price of crude oil went to negative.
[26:17] Let's say, negative went to 100 rupees. Why should I sell crude oil and give you 100 rupees?
[26:29] We have to pay money to extract crude oil. Containers, place, etc. will cost money. Will there be any business?
[26:42] The whole world has moved to a point where there is no business. We don't have use for crude oil. So that the storage cost will be saved,
[26:55] sellers have tried to sell crude oil by giving their money. when there are sudden events There will be uncertainty in the war.
[27:09] In the country where crude oil is being produced, if there is no production due to the war and uncertainty, Crude oil consumption won't be there.
[27:21] If the virus causes jobs and businesses to be disturbed, But we have to remember that crude oil prices will be impacted.
[27:33] Now, let's talk about stocks. Let's try to find out which stocks will be impacted by the rise and fall of crude oil. In the beginning, upstream companies, midstream companies, and downstream companies
[27:47] Because transportation, marketing, and processing But, upstream and downstream companies will be affected by the change in profitability and margins.
[28:01] Remember that, the rise in crude oil prices for upstream companies is positive. the rise in crude oil prices means that they sell products at a lower rate than their previous sales. The reason why the rise in crude oil prices for downstream companies is
[28:16] that downstream companies will refine the prices of the rising prices and sell the products. If they can raise those prices, then it will be neutral to positive But, because of the government regulations,
[28:32] It takes time to change the prices. Because of the price in the basket, the prices of petrol and diesel have to be changed. because of the government restrictions,
[28:46] the prices of petrol and diesel are not being raised at the same rate as the prices of crude oil, So, the rise in crude oil prices is negative for downstream companies. So, upstream companies are directly proportional to the price of crude oil.
[29:03] When crude oil is falling, these prices will fall. We will be watching the stock ONGC Down stream companies which are inversely proportional to the price of crude oil. The main stocks we observe are HPCL & BPCL
[29:19] Apart from these, many companies' buy products are made from raw materials. As you can see on the screen, all these sector related stocks are negative when crude oil is rising.
[29:33] These are the industries that use paints, tires, plastic polymers and synthetic polymers. Pipe, PVC, Phenolux, Astrol, synthetic textiles,
[29:45] lubricants like engine oil like Castrol, cement companies use pet coke for cement production. Pet coke is also related to crude oil.
[30:00] Cement companies' prices react to crude oil prices. Aviation companies like Indigo, SpiceJet, are also related to crude oil prices. like sparing extracting oil and exploring comapnies,
[30:16] for most of the companies, raise in crude oil prices are negative and positive when they fall. Because there are many companies which use the crude oil as raw materials. Along with that, even footwear companies' crude oil prices are related to it.
[30:29] When crude oil prices are rising, it's negative for the economy. I'll tell you how many negative factors we have on the economy. Not an exporting country.
[30:43] We have to import in dollars. the crude oil we use today is next we have to give more rupees than the money we gave in the previous month.
[30:58] So, the increase in crude oil prices is negative for the economy. Indian rupees will become weak. If this happens, our Indian bond ratings and global bond ratings will also get impacted.
[31:14] So, overall, if an economy is importing crude oil more, The countries which export crude oil, or if you look at the Middle East or Gulf countries,
[31:29] Because other countries buy for more money than the previous money. the Indian economy is negative in this point of view. If we spend more than we expected,
[31:44] These consequences will increase when our crude oil prices rise. we have to increase the petrol and diesel prices at some point. then the lorries and the people who transport all these goods,
[31:59] For example, look at the auto charges. How much do you have to pay now? If they want to drive an auto,
[32:11] We are looking at auto and bus. the people who transport goods, commodities, But who will be the ones who get those increased charges?
[32:24] I have seen many times where petrol and diesel prices have increased. Without understanding these I used to think what happens if the price of petrol and diesel increase by just 1 rupee the people who use the diesel and transport it,
[32:38] When we finally come to the products we use, their prices of the products they use, So, the increase in crude oil prices is negative for the economy.
[32:51] We can see it. But why are crude oil prices falling? First, crude oil is being produced more than expected.
[33:03] The price has fallen because of the increase in the supply. When will the demand decrease? And when the industries reduce the use of crude oil
[33:16] If we reduce all the products and use, it means there is no growth in the economy. But if the price of the demand decreases, it is negative for the economy.
[33:32] So, we can't see if the price of crude oil increases or falls. If the price of crude oil decreases drastically, we need to understand why it falls. So, our view on crude oil should be balanced.
[33:46] If you found it interesting, please like the video. And if you find these efforts valuable and want to support us further, and even in our Telegram channel.
[34:00] If you think our efforts have added value to you, I will come back with another video. Jai Hind!