High volumes of geopolitical news encourages increased trading in energy markets; oil and natural gas are most traded commodities on the Capital.com platform 

November 14, 2022/Capital.com

According to the Q3 2022 Pulse Report published by global retail trading and investing platform Capital.com, commodities trading in the third quarter of 2022 represented 39% of total trades on the platform, versus an average of just 16.25% during the 2021 calendar year. The retail penchant for energy markets has continued so far into Q4, with crude oil and natural gas markets commanding the top two most traded spots on the Capital.com platform throughout October 2022. 

According to Laura Lin, Chief Executive Officer, Capital.com Asia Pacific, retail interest in energy markets is in part driven by recurring and widespread coverage of geopolitical events, which is likely informing heightened trading activity in these markets.

“As traders have adjusted to the ‘new normal’ in interest rate markets and growth company valuations, equities are becoming less sensitive to news flow, which is where a lot of retail traders look to for potential opportunities. Energy markets, however, are driven by geopolitical situations that can be analysed, such as OPEC policy and natural gas shortages from Russian supply cuts. Unfortunately, there is no end in sight for these supply issues, and the result is that trading has been experiencing higher volumes in our Crude and Natural Gas CFD products.”

Justin Mcqueen, Market Specialist, Capital.com, said news around China’s zero-covid policy is providing further impetus for traders looking to take trade in oil and gas markets.

“Rising speculation over China potentially deviating away from its zero-covid policy have provided traders with a clear narrative given that China is the largest consumer of commodities. However, Chinese officials have since quashed rumours, which in turn has since seen oil prices pull away from its recent highs. What’s more, the rise in covid cases, hitting a fresh 5-month high, has further prompted a retracement of the rally in oil prices.

That said, demand-supply imbalances remain favourable towards the energy sector with the Environmental Investigation Agency recently downgrading their outlook on US crude supply by 21%, suggesting that the price of oil will likely remain underpinned. For now, the outlook seems to support further gains in the oil complex.

Elsewhere, after a period of milder than usual weather for Autumn across Europe. Natural gas prices look to have put in a short-term bottom and with winter coming for Europe, higher natural gas prices are likely going forward.”

The Pulse Report is a proprietary report published quarterly by Capital.com. The Q3 2022 Pulse Report captured data on all executed trades on the Capital.com platform globally between 1 July 2022 and 30 September 2022.

For more information on how to trade the news, capital.com offers explainers , please visit https://capital.com/trading-the-news-how-markets-react-to-new-events-