largest traded commodity

The energy commodity market is by far the largest in terms of contracts traded and turnover. While there are many types of energy commodities available to trade, it’s the black gold which is traded the most. Brent Crude Oil is mostly traded on the ICE (Intercontinental Exhange), whereas WTI is mostly traded on CME (Chicago Mercantile Exchange). The Brent Crude Oil production is more scalable than the competing WTI. As WTI is drilled and stored inland, there are a number of logistical obstacles that limit production.

For example, a decrease in new home construction can signal a slower economy, leading to a drop in copper prices. Below is a list of the most actively traded commodities taken from data compiled by the Futures Industry Association (FIA). J.P. Morgan estimated Brent crude oil to average $104 in 2022, while Swiss investment bank UBS expected the crude oil to average $125/bbl at the end of this year. EIA forecast Russia’s total liquid fuels output could decline to 9.3m barrels a day (b/d) in the fourth quarter of 2023, from 11.3m b/d in the first quarter of this year.

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However, it is also used to produce alloys including brass and bronze. Copper is primarily mined in Chile, followed by China, Peru and the US. It said the plan would explore bringing in strategic partners and selling non-production land and buildings. It also aimed to renegotiate with some creditors, including a major energy supplier. Commodity trading has several benefits depending on the market participant. It provides a marketplace to sellers and ensures an efficient way for price discovery.

It remains the investment of choice in times of uncertainty, such as wars and hedge against inflation. It is not surprising that gold ranks second on the list of top traded commodities in Earn2Trade offers a trading platform that can amplify the gains of a successful trader. By enrolling in the Gauntlet Mini™ Program, someone eager to become a trader can access the educational platform along with a trading account that provides a real-time experience. Upon completing the Program, the trader is guaranteed funding and can earn actual profits using the capital provided. The profit-sharing mechanism favors the trader, and it can be leveraged to generate higher returns through commodity trading.

Brent Crude Oil

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largest traded commodity

The following is a list of futures contracts on physically traded commodities. A stronger US dollar often makes commodities more expensive for holders of other currencies, which could dampen buyers’ appetite to buy the commodities. The metal had gained in the first quarter of this year, tracking gains in other precious metals and commodities due to geopolitical tensions. While it only came fourth on, Brent crude oil has remained one of the most traded commodities in the world. Crude oil prices have rallied since last year as demand gradually recovered as more countries eased Covid-19 restrictions.

What are commodities?

This includes changes in supply and demand, geopolitical tensions, and currency values. This commodity is desirable to long and short-term traders because of its high volatility in price. The fluctuations in price make this commodity a lucrative asset if traded successfully.

  • The price of commodities is also susceptible to economic conditions, which is another opportunity for traders to exploit.
  • Major countries producing the crop are the US, Brazil, Argentina, and China.
  • Commodities prices – from oil, natural gas, copper to gold and wheat – continued their robust performance in the first quarter of 2022 following Russia’s invasion of Ukraine in February.

Gold is widely considered to be a ‘safe-haven’ asset, as it tends to hold its value or rise in times of economic and political uncertainty. For this reason, many traders move money into gold when the dollar is falling, so gold’s price often has an inverse relationship with the value of the dollar. Find out more about the factors that influence the price of gold. Soyabean prices can be affected by demand for animal feed, biodiesel, and meat and dairy substitutes, along with factors that could affect supply such as unusual weather conditions. As the US is a major producer, prices can also be influenced by the strength of the US dollar – generally rising in price (nominally) as the US dollar falls and vice versa. In 2018, speculation about Chinese tariffs on US soyabeans – and their eventual implementation – also had a dramatic impact on prices.

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Contrary to what many people think, gold is not the most expensive metal to trade. In 2022, 37,091,448 Futures and Options contracts were traded on the LME. COMEX holds the record for the most traded copper Options contracts in a single day. On Friday the 21st of September ,089 contracts (91,727 metric tons) were traded.

  • The price of Brent oil, like any other type of crude oil, is highly dependent on economic activity.
  • Agricultural subsidies – particularly US subsidies – can also have an effect on prices.
  • We want to clarify that IG International does not have an official Line account at this time.
  • It has become a popular asset to traders due to its high volatility, allowing them to take potential profit from price fluctuations.

There are many factors affecting commodities prices such as geopolitical tension, local conflicts, weather, government policies and exchange rates. Wars could damage production and distribution infrastructure as well as stop production due to security issues. Rains, drought and other natural disasters can also increase or cut commodities production, subsequently affecting prices. In addition, remember that there are many factors that influence the rise and the fall of commodities prices.

What Are Some Factors in Liquidity?

When evaluating a commodity for tradability, volume and open interest are important metrics to watch. Volume is the total number of contracts that trade, and open interest is the total number of open long and short positions in a market. The more volume and open interest in a commodity, the less slippage.

Copper, broadly used industrial metal

The price of Brent oil, like any other type of crude oil, is highly dependent on economic activity. If the price of natural gas increases, the demand for Brent rises as well, which can drive the price up. Commodity trading also offers a host of unique propositions to traders that other financial products may not exhibit. Traders can use commodity trading to enhance their returns when the capital markets (equity and debt) are underperforming.