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Being an energy investor and playing the markets has been a real rollercoaster ride in recent times with a rise and fall in oil prices to keep you on your toes and offering plenty of opportunities to profit if you got your timing right.

The question for investors right now is where is the oil industry heading in the future and how can you profit from the rebound that is expected to come?

Here is a look at how to interpret the market data and understand underlying factors contributing to the volatility, why OPEC’s actions matter, plus an insight into why pessimism seems the order of the day for oil prices in the near future.

Making sense of it all

There are downturns in certain industries and there is the sort of deep downturn that the oil industry has had to endure over the last couple of years.

On reflection, you might not think that this period would have been a good time to invest in oil wells or chase oil prices higher, but things can often change in a heartbeat and if history is going to repeat itself yet again in this industry, a recovery is around the corner, if not a boom.

What OPEC decide to do to protect its member’s interests and stimulate growth as well as protecting market share, is always an important consideration, as their policies and pricing decisions can often set the tone.

OPEC did agree to cut oil production back in 2016, and despite some dissenting voices, no one has broken rank and the agreement seems to be holding. The merits of this policy appeared to be bearing fruit as prices managed to strengthen after that decision was implemented but as U.S inventories have been building steadily thanks to the shale boom, the prospect of stronger oil prices has faded lately.

Don’t hold your breath

Any investor or oil company executive for that matter, who is waiting for a return to the halcyon days of $100 per barrel, might be in for a very long wait, and some analysts even speculate whether they will actually return to the sort of levels seen prior to the collapse towards the end of 2014.

Oil prices were on the floor at one point and the price per barrel dipped to below $30 before picking up the pace and managing to climb all the way up to $50 by the end of 2016. Not exactly the heady heights of yesteryear for sure, but it did provide a hint of promise that prices would continue to climb from that point.

Predictions of $60 per barrel have started to look wildly optimistic in light of further recent price dips, so where is it heading next?

Rollercoaster ride continues

You can find a diverse range of oil market analysts who are predicting that oil prices could hit $70 by the end of 2017 and others who are far more pessimistic and think that $40 per barrel is nearer the number we could be looking at.

That is a wild swing between the two positions and both views can’t be right, so you will have to try and decipher and interpret market conditions in order to see which opinion you agree with.

The truth is probably somewhere in the middle of the two estimates, but one thing is for sure, the roller coaster ride is likely to continue and there are going to be some wild swings in prices to negotiate or profit from if you get your timing right.

For example, some investors are watching events in Venezuela with interest, as political and economic turmoil will have an impact on markets as it is a major oil producing country.

You also have to consider the impact of oversupply as a result of the U.S shale boom, and once again, what action OPEC takes will make a difference. Its members are responsible for about 40% of global oil supplies so this is a group whose force can be felt when they want it to be.

Finding the price floor

If you are riding the waves of the oil price, a key piece of data you need to know is where the price floor is likely to be. If OPEC fails to extend their existing output cuts that could turn out to be below $40 per barrel.

OPEC announced six months of production cuts that took effect from January 2017 and that initially managed to set a floor for prices. However, the combination of increasing shale oil production and record-setting inventory levels are putting downward pressure on prices.

If OPEC doesn’t extend the current production cut deal there would appear to be every chance that markets would interpret that end to cuts as a negative factor and we could find a new lower level for prices that is below $40 per barrel.

Thomas Kent, a long-time finance and investing enthusiast, likes to help others by writing about his know-how and experiences. You can find many of his articles on personal finance and stock market websites.

image2Trading calls for keeping a close, eagle eye on the trends. There are trends and then there are Megatrends.

Megatrends are big-impact trends capable of affecting the industry and investors on global level. Megatrends are capable of changing the course of your future as well and hence XTrade always advises to keep a close eye on the development of trends while making decisions as past signals prepare you for the future and saves you from potential losses. So, first of all, let's take a look at how megatrends affect the entire industry.

Impact Of Megatrends On the Industry

The current era of trading is pretty competitive and the competition is growing at an exponential pace every minute, every hour and every day. That's why it is also important for companies to know everything that matters- What their clients need? What they think about the company? Are they happy with the company's products, services offered and customer service? What's their taste and preferences? These are vital pieces of information which help companies create products that attract customers.

Companies have to adapt themselves to customers' changing needs and their work models have to complement it too. This is a prerequisite to thrive and survive in the increasingly dynamic and ever competitive market. For instance — what XTrade offers is online CFD trading while other companies are known for offering online FX trading.

Companies need data in order to know what the client wants, so that new products, features or services can be launched which are capable of moulding client's habits or needs and makes your product 'wanted' more.

What Changes XTrade Has Observed In Recent Times?

The upsurge of mobile usage is no secret to anyone. It has increased exponentially and it will continue to do so in near future as well. With the advent of smartphones, tech related companies also plunged into making the most of the hand-held platform. For instance - gaming industry which was able to attract millions of customers. It can be easily concluded that other industries can make the most of it as well.

XTrade is implementing this knowledge in the investment industry is a very good example of it. Their web trader has facilitated quite a few useful elements in its features which are highly intuitive and user friendly.

According to XTrade, the biggest megatrend is social networking. In olden times, one would grab a job in a company and wouldn't leave it until he or she retires. Now, in this age of smartphones, social media and volatility of jobs has made it all different.

Nowadays people work in a company and interact with many others through social networking and other platforms available just a click away. Investment industry has expanded in a big way over the years. They want to make most of the developing economies, new investors coming in and yielding benefits.

This calls for collecting loads of data that can be analyzed to check out people's habits, needs and other patterns, so that new products and services can be created which benefit the end user and also makes profit in turn.

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We all have some major events in life that led to us getting where we are — professionally and personally. All kinds of events led me to become a journalist. But three events stand out to me that brought me to where I am today as a freelance writer specializing in personal finances, and fueled an interest in investing.

I could write a book on my financial path in life, but I can narrow my path to becoming an investor to three events. Without such a keen interest in investing, I think, I wouldn't have become a personal finance writer.

Here are the three main life events that led me to want to learn more about investing and to eventually write about it and related topics:

A stock picking exercise

I was in a rowdy history class during my senior year of high school. The teacher sent three or so "well behaved" students to the school library every week to chart stock performances from our local newspaper.

I did this with an eye on if news events about a company affected its stock price. If a company had bad press one day, did its stock price fall that week? Often it did, and it gave me a lifelong interest in how stocks perform after good or bad news is reported about them. ...continue reading