How to trade Brent crude oil futures? A complete guide from basics to practical strategies

Why Brent Crude Oil Is Worth Watching

In the global energy market, Brent Crude Oil Futures ranks alongside West Texas Intermediate (WTI) as one of the two most traded crude oil commodities worldwide. The importance of Brent Crude Oil futures stems from its role as the international benchmark for oil prices—originating from North Sea fields, characterized by light and low sulfur content, serving as a price indicator for Europe, Africa, and the Middle East regions.

Unlike other commodities, the main participants in crude oil trading are not only refineries and national reserves but also a large number of financial investors engaging through futures contracts. This makes the price discovery mechanism of Brent futures more transparent and creates arbitrage and hedging opportunities for various investors.

Current Market Situation of Brent Crude Oil

As we approach 2025, Brent Crude Oil futures exhibit typical oscillating trends. Early in the year, amid a sluggish global economy, prices declined from recent highs, with a dip below $63 per barrel in early April—marking a two-year low.

In May, prices stabilized between $64 and $66. During mid-June, geopolitical tensions (such as Israel’s airstrikes on Iran) caused Brent futures to surge over 10% briefly, breaking through the $73 mark. However, as concerns over escalating conflicts eased, prices quickly retreated to the $67–$69 range.

Looking at the full year, the International Energy Agency (IEA) suggests that if geopolitical risks continue to diminish and OPEC+ signals increased production, Brent futures may face further downward pressure in the second half of the year, with an estimated average price around $61 by year-end. Overall, the first half of 2025 has been relatively bearish for Brent crude, with clear fundamental pressures.

Core Characteristics of Brent Crude Oil Futures

The underlying asset—North Sea Brent Crude—has the following features:

• Light quality: API gravity around 38°, relatively light crude, with lower refining costs
• Low sulfur content: approximately 0.37%, better environmental standards than heavy oils
• Stable supply sources: mainly produced in UK, Norway, and other North Sea regions, with relatively controlled supply

Thanks to these features, Brent crude futures are among the most liquid energy derivatives in the international market. Their existence allows spot market participants to hedge price risks and provides investors with opportunities to profit from oil price fluctuations.

How to Choose Futures Contracts? Comparison of Types

Investors can select from various Brent crude futures contracts based on their capital and risk tolerance:

Standard Contracts vs Mini Contracts

Taiwan investors can also trade via Taiwan Futures Exchange with TWD using code BRF(, with specifications of 200 barrels per contract, margin of TWD 60,000, avoiding exchange rate risk but with lower liquidity compared to international contracts.

Price Drivers of Brent Crude Oil Futures

Historically, the long-term trend of Brent futures reflects the evolution of global energy politics:

From Regulation to Marketization)1970s-2000s(

Before the 1973 Yom Kippur War, oil prices were stable at $2–$3 per barrel. Post-war, OPEC began to organize, and prices surged to $30 in 1985. Subsequently, supply-side control over pricing shifted, and in 1986, Arab countries lifted production quotas, causing prices to plummet to $10. Over the next two decades, Brent futures mostly fluctuated between $10 and $30.

2000s: War, Financial Crisis, and Energy Crisis

Post-9/11, tensions in the Middle East increased demand fears, pushing prices higher. In 2008, amid a global economic bubble, Brent futures hit a record high of $147 per barrel. This frenzy spurred investments in unconventional sources like shale oil, ultimately reshaping the global supply landscape.

Shale Oil Revolution and Oversupply)2010s-2020s(

With the US opening crude exports and shale oil production soaring, Brent futures entered a downtrend starting in 2014. The COVID-19 pandemic in 2020 caused a collapse in global transportation demand, leading to historic lows in oil prices. Although there was some rebound, in 2024, Brent futures declined about 3% for the year, closing at $74.6.

Current Price Drivers

• Fundamentals: OPEC+ policies, US shale oil output, China’s economic growth
• Geopolitics: Middle East tensions, Russia-Ukraine conflict, Strait of Hormuz risks
• Financial Factors: US dollar strength, interest rates, large fund positions
• Inventories: US strategic reserves, commercial stock changes

Risks and Strategies for Trading Brent Crude Oil Futures

Brent futures are highly leveraged. For example, a standard 1,000-barrel contract with a $0.01 tick size yields a profit/loss of $10 per tick; a $1 move results in a $1,000 change.

Using a 10% initial margin, at an oil price of $85/barrel, a 1% price move could lead to an $850 profit or loss—equivalent to 10% of the initial margin. When account equity drops to the maintenance margin level (usually 5–7%), there is a risk of margin calls or forced liquidation.

Practical Risk Management Tips:

1. Maintain sufficient margin: Deposit 1.5–2 times the minimum to buffer against volatility
2. Strict stop-loss discipline: Set stop-loss points 2–3% below entry to prevent large losses in extreme moves
3. Consider transaction costs: Confirm broker fees (typically $1–$5 per lot) and include in profit/loss calculations
4. Position sizing: Beginners should limit trades to no more than 5% of total capital per position

Alternative Options for Small Investors

If margin requirements are still too high, small investors can consider trading Brent via CFD platforms. With 100x leverage, a minimum of $20 allows trading 0.01 lots (10 barrels). To reduce leverage, the same 0.01 lot can be traded with $600.

Compared to futures with fixed expiry dates, CFDs allow both long and short positions, offer more flexible leverage ratios, and typically charge no commission, making them more suitable for investors with limited capital who want to participate in the oil market.

Practical Tips for Trading Brent Crude Futures

To trade Brent futures effectively, investors should:

Fundamental Focus List

• OPEC+ meeting decisions and production cut compliance
• US weekly crude inventory data and shale oil trends
• Global economic indicators, especially China’s industrial data
• Middle East geopolitical developments (Iran sanctions, Red Sea crises)

Technical Trading Tips

• Combine support/resistance levels with moving averages for entry/exit points
• Control position size before major data releases
• Use volatility indicators to gauge market tension

Long-term Outlook Shale oil growth and renewable energy development will limit the upside potential of Brent futures in the long run. Unless significant geopolitical conflicts occur or OPEC implements aggressive cuts, prices are unlikely to break above $100 in the medium term.

Summary

As the most representative energy investment tool globally, Brent crude futures’ price movements reflect complex interactions among global energy supply, economic demand, and geopolitical risks. To profit from trading, investors must monitor fundamentals, technical signals, and risk management practices simultaneously. For those with limited capital, mini contracts and CFDs offer more flexible participation, but understanding leverage risks and strictly executing stop-loss orders are essential regardless of the chosen instrument.