Why Should You Trade or Invest in Trade Oil?
Oil is one of the most traded commodities in the world. Oil prices are the most watched commodity prices in the world for good reasons. The demand or oil comes from all the byproducts that can be produced from the raw material. One of the important thing to point out is that these products are depending on the way the world currently commutes and ships products. There will be a long term demand for fossil fuels even though some people say that the world is going green.
There is an old saying that I herd about investing and that is if you want to make the green, invest black.
Oil Byproducts that Create International Demand
In a breakdown of overall byproducts produced from oil 46% is turned into gasoline/petrol. According to amaziongstat.com gasoline consumption is largest in the United States, in particular, California. The bring up the point that many people would think developing countries such as China would use the most resources. Even though they don’t consume as much petrol as the United States they are catching up.
Up to 26% of oil is turned into the byproduct diesel fuel. Diesel Fuel is high in demand because there are so many different uses for this product. According to www.eia.gov there are many uses for this fuel. One of the large demands for diesel fuel is trucking and shipping industry. This can big rigs or large ships that are powered off this fuel. Another thing is this is used for construction and agriculture. There are millions of Caterpillar and John Deer heavy equipment around the world.
Jet fuel is up to 9% of the overall byproduct production. Over the years the demand for Jet Fuel has been in an uptrend. This demand could be from more commercial flights and the demand for air shipping.
Lubricants are about 1% of the overall produced byproducts. This type of byproduct has one purpose and that is to keep moving parts moving. This can be oil in automobiles or grease on a large piece of equipment.
3% of the global demand for oil is for the oil byproduct that is used to make roads and highways. According to the world factbook by the CIA in America, there are still many unpaved roads throughout the world. It is still a possibility that there will be more global demand for this byproduct as the world gets more developed.