Energy Commodities

What are Energy Commodities?

Energy commodities are the raw materials that are used to produce energy, such as crude oil, natural gas, and coal. Energy commodities are often traded on commodity exchanges around the world.

When people talk about energy commodities, they often refer to the actual physical commodity itself rather than a derivative contract on that commodity. However, many different types of derivatives can be used to speculate on the price movements of energy commodities.

Energy commodities are the raw materials that are used to produce energy, such as crude oil, natural gas and coal.

Types of Energy Commodities

Energy commodities are raw materials used to produce electricity and heat. These commodities include oil, natural gas and coal, as well as electricity itself. The market for energy commodities is quite large and fluctuates in response to global economic trends, as well as political events that affect oil production and consumption.

  1. Crude Oil

The first thing you need to know about crude oil is that it's a catch-all term for a wide range of fossil fuels, including natural gas liquids (NGLs), natural gas, and synthetic crude oil.

Crude oil can also be refined into petroleum products such as gasoline, diesel fuel, and jet fuel.

  1. Brent

Brent crude oil is a grade of crude oil used as a benchmark in pricing. It is an international standard and is priced in US dollars per barrel. The price of Brent crude oil was set by the Intercontinental Exchange (ICE) in London until 2004, when a rival electronic exchange called International Petroleum Exchange (IPE) was established.

  1. Natural Gas

Natural gas is a naturally occurring fossil fuel. It consists mainly of methane, which is the main component of marsh gas and coal seam gas.

Natural gas was originally used as an illuminant before electricity became widespread. Natural gas is still used as a fuel in many countries around the world.

Natural gas is also an increasingly popular source of thermal energy, particularly in North America where it has replaced other fossil fuels such as coal and oil in some industrial applications.

  1. Gasoline

Gasoline is a mixture of hydrocarbons (organic compounds containing only carbon and hydrogen). Gasoline is used as fuel for internal combustion engines in cars, trucks, airplanes, lawn mowers, motorcycles and other vehicles.

The word "gasoline" was coined in the 19th century from "gas" and the chemical suffix "-ole," which refers to a substance with a carbon-hydrogen bond. The word gasoline is often used as a synonym for petroleum distillates.

Gasoline is also known by various nicknames such as "petrol" (not "petroleum"), "gas," or simply "fuel."

  1. Propane

Propane is a three-carbon alkane with the molecular formula C3H8. A by-product of natural gas processing and petroleum refining, it is commonly used as a fuel for engines, oxy-gas torches, portable stoves, and residential central heating. Propane is one of a group of liquefied petroleum gases (LP gases). The others include butane, propylene, butadiene, butylene, isobutylene and mixtures thereof.

  1. Uranium

Uranium is a naturally occurring element that has been used as a source of energy since the 1960s. It is found in almost all countries of the world, including Canada and Australia.

Uranium is mined from the ground in much the same way as coal or other minerals. Once extracted, it must be processed to make it suitable for use as fuel in nuclear power plants. In contrast, nuclear weapons are manufactured using enriched uranium.

  1. Methanol

Methanol (CHOH) is a chemical with the formula CH3OH. It is the simplest alcohol, and is a light, volatile, colorless, flammable liquid. Methanol is produced from natural gas, by petrochemical processes, or by hydrogenation of carbon monoxide. The primary use for methanol is as an octane booster in gasoline for spark ignition engines. It is also used as a source of hydrogen by itself or blended with other fuels to form a fuel cell (H2). Methanol can be made from biomass through the process called methanol synthesis.