Commodities For Dummies, 3rd Edition

Chapter 11

It’s a Crude, Crude World: Investing in Crude Oil

IN THIS CHAPTER

Taking a look at key metrics

Getting a grip on the market fundamentals

Profiting from the high price of crude

Crude oil is undoubtedly the king of commodities in both its production value and its importance to the global economy. It’s 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 the first edition of Commodities For Dummies was published in 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 (90 million as of 2022, up from 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 many 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 ...