Investing in energy resources
Are you fascinated by the world economy and international trade? Wondering why fuel prices change so often and rapidly? Would you like to know the factors that determine the situation on international energy commodity markets to the greatest extent? Wondering which raw materials are most desirable and popular among investors? You have absolutely no idea how it all works? Would you like to increase your knowledge in this area? Are you looking for proven and reliable information? Do you want the message to be clear and understandable, also for a layman? If so, you’re in the right place!
Characteristics of the energy resources market
At the beginning of this text, it is worth explaining quickly and easily what energy resources really are. Of course, these are raw materials from which we are able to obtain energy after appropriate chemical or physical processing. Therefore, the following substances should be included among them: natural gas, oil and coal. Of course, each of these raw materials is a natural resource, which occurs in a limited way on our planet. It is worth knowing where the largest deposits of these substances are located. As far as oil is concerned, three countries are leading the way in its production: Saudi Arabia, the USA and Russia. In the case of natural gas, the three countries that produce it most are Russia, the USA and Canada. As far as coal is concerned, however, the largest deposits can boast China, Russia and the USA. The market of energy resources is thus shaped practically only by the above-mentioned powers. In short, we can say that it depends on their internal clashes and conflicts, at what price we will be able to purchase goods made of these raw materials.
The most popular energy resources among investors
As far as trade in energy resources is concerned, crude oil and natural gas are by far the most popular among investors. This is for obvious reasons: it is from these raw materials that the most desirable substances in the world are produced – for example, fuels for cars and aircraft.
What does the price of energy resources depend on?
The price of energy resources is very vulnerable to frequent and extreme changes. This can easily be observed by car drivers who regularly refuel. Very often it happens that the price of fuel changes practically from day to day. Of course, the geopolitical situation undoubtedly has the greatest influence on this – in short, everything depends on the political situation in Russia, the USA and the Arab countries. Of course, the greater the tensions between these powers, the more expensive or cheap the raw material is. An important factor is undoubtedly the demand for a given raw material and the natural situation in a given country. If there is a sudden catastrophe or natural disturbance, such as flooding or drought, the prices of raw materials change rapidly. A good example is also how fuel prices will be affected in the future by the crisis caused by the international coronavirus pandemic.