Look around you. Whether you’re talking about oil companies, transportation or items we use every day, the energy markets have a direct impact on our lives and economies of every country. Arguably, energy markets are more interconnected to other asset classes and influential than any other commodity market, which is why, every day, all eyes on are crude oil, natural gas, gasoline, jet fuel, coal and other energies traded.
These markets are volatile – and can be sparked by geopolitical events that can happen just about anywhere energy is produced, transported or consumed. Weather and seasonality can play a major role in price spikes, or price drops. Investors who learn the fundamentals of the energy markets can find opportunities that span asset classes and help diversify a portfolio. Energy futures and options contracts offer investors a chance to take a position in these markets, or hedge their positions.