Commodities and Energy
A Reuters guide to Commodities and Energy
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The commodities and energy markets trade in financial instruments, but, unlike the other financial markets, the commodities and energy markets also trade in physical products. The agricultural markets trade in grain, oilseeds, livestock and products like sugar and coffee, known as soft commodities. The metals markets trade in precious and base metals. The energy markets trade in oil, gas and power.
The commodities and energy markets also trade in derivative financial instruments, such as futures and options. Futures were originally developed to hedge against seasonal price fluctuations in agricultural commodities by establishing forward purchase prices. Today, they are widely used across the commodities and energy markets for hedging and for speculative trading.
The recent upsurge in commodities and energy prices has generated interest in the sector with the markets seeing increased investment in both physicals and derivatives. The energy and metals markets have been particularly buoyant. Oil prices have reached record highs this year on the back of robust demand and concerns about future production capacity. Base metals performed strongly in 2004, largely as a result of Chinas growing consumption, while the gold price rose against US dollar weakness and a fall in mining output.
The commodities and energy markets are global; trading takes place 24 hours a day around the worlds time zones. To perform effectively in this fast-paced environment, commodities and energy market professionals need services that enable them to track prices and other market information, analyse data and gain insight into market movements.
Reuter offers a range of products tailored to the needs of professionals trading in commodities and energy. The range includes powerful global cross-asset services and products providing smaller sets of market-specific information and data. Reuters products deliver a combination of news and market data with sophisticated research, analysis, communication and order-routing tools. They are easy to use and help streamline work processes.
Reuters has a long history of reporting on the commodities and energy markets. Its global editorial network includes teams of market-focused specialists. Around 140 correspondents cover the commodities and energy markets in depth, reporting on the key issues affecting commodities and energy prices. Reuters provides market data from every major commodities, energy and futures exchange around the world and from key over-the-counter contributors.
