Black Gold
Parent Asset Class

Oil continues to rule the energy sector as demand for it keeps rising. Oil companies have also sustained their ability to profit, notwithstanding a challenging oil price environment, by improving their sustainability in operations. There are many ways to invest in oil commodities — purchase an oil barrel, engage in a futures contract or options contract, or buy shares of an oil ETF.

Oil Uses (2018)
  • 20% cars & light trucks
  • 24% trucks
  • 12% other transport
  • 28% industry
  • 5% power
  • 11% other

Oil Pricing

United States Crude Oil Demand

  • Typically largest in summer (big driving season)
    • Crude in storage drops
  • Refineries go into maintenance mode in fall when demand goes down
    • Crude in storage increases
  • Over time US fuel economy has almost doubled (since 1970s)
  • Oil exporting was illegal in the US from 1976 till 2016

Largest Oil Producers

  • Worldwide 80 million barrels per day (2018)
  • Top 3 produce ~37% of all world oil
    • Saudi Arabia (~10 Million Barrels / Day)
    • United States (~10 Million Barrels / Day)
    • Russia  (~10 Million Barrels / Day)
    • Are large enough to impact prices with production increases or cuts
  • Russia & Saudi have typically been the largest - fracking pushed US to the top spot in late 2010s

Impact of Renewables (2018)

  • Although renewables are growing, oil is is still the backbone of transpiration energy
  • The world buys $6billion of oil every day