Our world would not be the same without the discovery of natural energy sources, such as crude oil and natural gas.
Given the popularity and value of these energy sources, it is no surprise that they have become popular assets to trade in the online markets.
In this article, we will take a quick look at crude oil and natural gas as tradable commodities.
Natural gas is a gas found alongside oil reserves in the ground and is one of the cleanest energy sources due to its very low carbon dioxide emissions when burned.
It is used for heating, the production of electricity, and even cooking at home with gas stoves.
Demand and supply are the key factors determining the price of natural gas.
This demand and supply in return are affected by outside factors, such as:
Extraction and treatment
Weather and seasonal patterns
Accidents and Natural disasters
The biggest consumer of natural gas is the USA, followed by Russia, China, and Iran.
Therefore, any changes in demand from these countries can significantly affect the price of natural gas.
Crude oil is a fossil fuel consisting of hydrocarbon deposits and other organic materials. It is obtained through drilling in oil reserves deep underground.
It is considered the most important energy commodity that is heavily traded throughout the globe due to its high volatility.
It is used in manufacturing, energy production as well as in transportation. The fact that the oil supply is both variable and limited has made it one of the most valuable natural assets, dramatically affecting the global economy.
As with any energy commodity, demand and supply are the key factors determining crude oil prices.
The biggest consumer of crude oil is the USA, followed by Japan, China, and Industrial European countries, such as Germany and the UK. Changes in the demand of these countries can significantly affect the price of crude oil.
Here at Amega, you can choose to trade on WTI (USOIL - Crude oil extracted from the USA) or Brent (UKOIL - crude oil extracted from the North Sea).
Keep an eye out for the monthly OPEC (Organization of the Petroleum Exporting Countries) meeting report. Their announcements can cause significant volatility in the energy commodities market and are an excellent opportunity to take advantage of.