Tue. Dec 6th, 2022
Tips To Establish An Oil Trading Company

 

Oil and gas trading is a highly regulated industry. UAE government has outlined clear rules to ensure efficiency in the industry. In addition, there are several additional requirements for oil trading companies in Dubai. Traders must possess outstanding skills and knowledge to make profitable trades. They should be familiar with the commodity’s long-term price history and the physical variations of different grades. If you have decided to invest in the oil industry, this guide will help you establish a successful business.

Creating a business plan:

Before you begin implementing your business strategy, you’ll need a solid business plan. It should have short-term and long-term objectives. The short-term objectives will deal with how you’re going to get up and running, and the long-term objectives will be focused on how you plan to stay in business five years from now. Both of these objectives should include profit and growth projections.

The first step in creating an oil trading company business plan is to identify the type of product or service you plan to offer. If you sell oil, you’ll need to know about the different types of crude oil available in the market. You’ll also need to know about the supply and demand of each type of crude oil.

Opening a trading account:

A few requirements exist to open a trading account to establish an oil trading business. One of them is that you should have a corporate bank account. Additionally, you must have an office space to conduct your business. You may also need to register with a regulatory agency such as Ejari.

Choosing a trading strategy:

If you want to establish an oil trading business, you must choose a trading strategy for the market. This is a vital step because many factors can affect oil price. For instance, you cannot predict the price of oil in advance, and the price could increase or decrease over time. You must also know the types of crude oil. There are two major types: heavy and sweet and light and sour. The former is more expensive and produces fewer products, while the latter has higher prices and lower yields.

Investing with little money:

One of the best places to invest with little money is oil companies. You can buy shares in companies that are public and trade for a low price. This is a way to get exposure to the energy market, but you need to understand the risks involved. Investing with as little as Dh 2 in a futures contract is possible.

By Douglas