Crude oil is undoubtedly the king of commodities, in both its production value and its importance to the global economy. Crude oil is the most-traded nonfinancial commodity in the world today, and it supplies 40 percent of the world’s total energy needs — more than any other single commodity. Since 2006, the importance of crude oil has only increased.
Despite many calls to shift energy consumption toward more renewable energy sources, the crude reality is that petroleum products are still the dominant resource worldwide. In fact, to this day, more barrels of crude oil are traded daily (87 million barrels by 2010 figures) than any other commodity.
Crude oil’s importance also stems from the fact that it’s the base product for a number of indispensable goods, including gasoline, jet fuel, and plastics.
Oil is truly the lifeblood of the global economy. Without it, the modern world would come to a screeching halt. Drivers wouldn’t be able to drive their cars, ships would have no fuel to transport goods around the world, and airplanes would be grounded indefinitely.
Because of its preeminent role in the global economy, crude oil makes for a great investment. However, the oil industry is a multidimensional, complex business with many players that often have conflicting interests. Proceeding with a bit of caution and making sure that you understand the market fundamentals is essential for success.