Venturing into the commodities market through oil and gas investment provides access to one of the foundations of the global trade system. With greater profits at the trader’s disposal, a savvy investor with knowledge of what drives commodity prices can leverage oil and gas investment into greater profits.

One of the most popular commodities involves various energy products including oil and gas. With oil and gas playing such a vital role in our everyday lives, the price of energy commodities can affect the cost of gas, groceries, clothes, electronics, and home heating.

Most Commonly Traded Energy Commodities

In addition to the most heavily relied upon and used commodities in the world, oil, and gas commodities are the most traded as well. The four most commonly traded energy commodities include:

Crude Oil

With the largest impact on the global economy, crude oil is utilized and refined into useable petroleum products like gasoline and diesel. The price of crude oil can vary depending on supply and demand, global economic conditions, and worldwide production.

Unleaded Gas

Used as a refined crude oil product that produces fuel for transportation vehicles, unleaded gas has many uses for residential and commercial purposes. With so much dependency on gas, any increase in gas prices can have a tremendous economic impact.

Natural Gas

As a clean and efficient fossil source of heat, natural gas is increasingly being used more to heat and power homes and businesses. Relying on natural gas to heat homes allows extreme winter weather to severely alter the demand and price.

Heating Oil

Using heating oil to heat homes has caused the commodity to be the second most produced product from crude oil just after gas. With the costs of heating oil directly impacted by energy needs, the price also fluctuates based off weather-related demands.

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Oil and Gas Investment Volatility

With the performance of energy production subject to a variety of risk factors, it’s important to know what other outside influences could impact the oil and gas commodity market:

Geopolitical Conflicts

With the Middle East, Venezuela, and Russia major producers of crude oil, any political conflicts in those areas can lead to production slowdowns and increased prices.

Alternative Fuels

As alternative fuels like wind and solar begin to enter the energy market, the more people and businesses that turn to alternative fuels could affect the demand for oil and gas.

Maneuvering through the numerous risk factors impacting the global output and energy commodities a risky and tricky investment. With the advanced investing tools available through Saint Vincent Holdings, our traders have all the resources needed to hedge the volatile market effectively.

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