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Equities – 6 Popular Types Of Energy Commodities To Trade

Energy is one of the timeless demands that will never go out of fashion. That is until we make a sudden quantum leap in harnessing alternative energy sources. And that is not going to happen anytime soon. Even with alien technology. Other things with global demand comparable in demand and longevity include telecommunications and transportation.

The impact these markets can have on a society is so big that we often see governments, especially newly established ones, take a tight grip grip on them until the local economy is mature enough for private entities to handle these industries themselves. Other than that, they can have huge implications to a country if control of these industries fall into less friendly hands.

Can you imagine if our country is having huge tension with another, and the companies in control of the energy here have their parent companies worn to allegiance to the conflicting country? What if they operate and have control of communication channels as well? That’s a nightmare scenario isn’t it?

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It’s a good thing that we do not have such a huge problem with these issues today. But I brought them to attention so as to drive home the point of how important and essential energy is. A neighbor would be pulling our strings like puppets should we have a dependence on their continued supply of energy.

The relentless demand for energy, coupled with the many methods it is harvested, makes it a very popular play for traders to make a living from.

Here are the 6 most common types of energy commodities being traded on a daily basis.

Crude oil

Crude oil is probably the most recognizable commodity to the average person. Financial media go on and on about the price of a barrel of oil. Even talk shows make it a point to joke about oil prices just get a laugh from the audience. It is safe to say that it is the most reported energy commodity in mass media commentary.

Other than that, drivers can often find a rise in petrol prices related to a rise in crude oil prices. It is the most painful way to learn about a rise in oil prices.

Many industries, especially industrial manufacturers have a high dependence on the price of oil both for production and pricing their own products. The production and processing of raw materials require oil directly or indirectly to run production machinery as well. With a seemingly unquenchable thirst for oil in the world, crude oil is unquestionably the most traded energy commodity in the market.

Natural gas

If we describe the granddaddy of crude oil consumption come from industries, then the claim general consumers can make on energy commodities is natural gas.

We use natural gas from things like cooking to heating. For a lot of people, it is something we use everyday without noticing. But even though it dwarfs in comparison to crude oil in consumption, it is still a very popular energy source that the world uses.

There are now even hybrid cars made to run on natural gas. Although you can look forward to a lesser performance level from a vehicle that runs on natural gas compared to the beloved petrol, some drivers do find going natural as just an inconvenience small enough to ignore.

Electricity

Few people can imagine life without electricity. Even third world countries appreciate and use electricity to power their stuff especially at night. If we take into account the electricity that can be produced by a compact generator, electricity is the most easily produced power source from an input to output ratio.

In many ways, it is also the most convenient. As we get more and more modernized, more unconventional and unorthodox methods of generating electricity is bound to be discovered. Wireless electric power looks like being the next big thing. That is a whole different science altogether.

Coal

It might be hard for a lot of people to comprehend. But at one point in history, coal was the major force to be reckoned with for energy consumption. Even today, a huge amount of electricity is generated from burning coal.

Trains were run by coal, ships were powered by coal, even food were cooked by clay stoves heated by coal.

But the fall in coal demand is not really attributed to a lack of supply. But due to the discovery of alternative energy sources and improvement of others. It is something the market can always fall back on since it has ample supply.

Solar

A big trend that is emerging in the last decade is how solar power is being adopted by regular consumers. No longer are huge rooftop-sized solar panel the sole domain of million-dollar organizations. More and more home owners are fixing up their own solar panels to deliver power to their homes.

Even though you cannot expect a few solar panels to power your whole house, the energy you can self-harness can be significant enough to save a lot of money over the long term. This is why many households these days find it worthwhile to spend hundreds of dollars for solar panels for use at home.

After all, solar power is free. It’s environmentally friendly. And some of the devices designed to harvest them can look really cool. They are definitely popular in the realm of small electronic devices.

Wind

Wind power started to really catch the attention of the general public when movies started to film select scenes with those huge fan-like structures spinning as a backdrop. These mega windmills look awesome and spectacular.

Like solar, wind is an alternative energy source that is renewable and environmentally friendly. The drawback is that companies will need to make significant financial investments in order to exploit them. And the average consumer will have no place for it in their living rooms.

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