COMMODITY CORRELATION: OIL
Petroleum, also known as crude oil, is a major driver of the global economy. It’s best known as, and used mostly (by volume) for producing, the gasoline that powers most cars. Less well known to many, however, is oil’s use in creating the natural gas that heats your home, the asphalt you drive on, all plastics, and food-protecting pesticides.
Because oil is used in so many ways, growing economies usually demand a lot of it. The emergence of China and India as economic powers has dramatically changed the global oil demand equation. As new businesses have formed and grown in those countries, and increasing numbers of their populations have attained financial affluence, the Far East has become a growing sponge for oil.
My recent visit to China included a speech in Chengdu, near the Tibetan border. Even way out there, the city was modern, business was booming, and there were cars everywhere. Beijing was just the same; they need energy!
Fortunately, as a forex trader you can profit from the movement in oil prices by trading the Canadian dollar.
Loonie for Oil
In 2006, Canada was the 15th largest exporter of oil, as shown in Table 6.1
Canada’s position in the world oil rankings seems poised for a boost in the coming years. As of January 2007, Canada’s proven oil reserves were estimated at 179.2 billion barrels, ranking the country second only to Saudi Arabia (Energy Information Administration (EIA) of the U.S. Department of Energy International ...