The commodity groups

Energy commodities (oil and gas)

4 min

Energy is the largest commodity complex by traded value, and crude oil is its centrepiece.

Crude oil

Crude trades against two global benchmarks:

  • WTI (West Texas Intermediate) — the US benchmark, traded on NYMEX/CME, deliverable at Cushing, Oklahoma.
  • Brent — the international benchmark, traded on ICE, priced off North Sea crude. Most of the world's oil is priced relative to Brent.

Oil is exquisitely sensitive to geopolitics and to OPEC+ production decisions, which can add or remove millions of barrels a day. Demand tracks the global economy and the driving/flying seasons.

Brazil is now a major oil producer thanks to its offshore pré-sal fields; Petrobras (PETR4/PETR3) is one of the most-traded stocks on B3 and a direct play on the oil price.

Natural gas

Natural gas is used for heating, electricity and industry. It is far more regional than oil because it is hard to transport — it must be piped or liquefied (LNG) and shipped. That makes gas prices in the US, Europe and Asia diverge sharply, and it is one of the most volatile commodities of all, driven heavily by weather (cold winters, hot summers spiking demand for power).

The link to other markets

Energy ripples everywhere: fuel and fertiliser costs feed into agriculture, and in Brazil the sugar-ethanol link ties cane directly to energy prices. Energy is rarely an isolated bet.

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