What are Energy Commodities?
Among commodity categories, the energy category has the biggest impact on our daily lives. Energy prices affect the cost of everything we consume, mentioning groceries, the clothes we wear, electronic devices and the gasoline we put in our cars. They define even the costs of cooling and heating our homes, offices, hospitals, schools. Without energy, the world would be not a hospitable place to live in.
Non-renewable energy resources are the most developed energy commodity category. Traders can invest in these commodities directly or indirectly through products like CFDs, ETFs and shares.
The current global energy trends might create investment opportunities in the next decades like, emerging market growth, energy efficiency revolution, population growth, electricity penetration, industrialization in developing countries.
MAIN ENERGY COMMODITIES
The most important trends in energy markets is the trade of energy assets between developed and developing countries. Global energy usage is expected to raise 30% in the next two decades.
Crude Oil comes in different variations based on the physical characteristics of the location. The most traded varieties are West Texas Intermediate (known as light sweet crude) and Brent Crude. Crude Oil is the primary energy resource in the world- the backbone of transportation and electricity generation which powers our lives. The major trading regions are:
• West Texas Intermediate (WTI), Texas, Light Sweet
• Brent Crude, North Sea, Light Sweet
• Bonny Light, Nigeria, Light Sweet
• Dubai Crude, Middle East, Medium Sour
• OPEC Reference Basket, Middle East, Heavy Sour
• Urals, Russia, Heavy Sour
Natural gas is created by millions of years of transformation of dead animals’ remains and plants which formed thick layers of organic matter together with sand and silt. It is used as a power generation in commercial and industrial applications. Top 5 natural gas producing regions are:
• United States, 766 Billions of cubic meters
• Russia, 598 Billions of cubic meters
• Iran, 185 Billions of cubic meters
• Qatar, 164 Billions of cubic meters
• Canada, 150 Billions of cubic meters