Energy is an essential service in everyday life. It is needed to heat homes and public places, as well as power mobile phones, computers, cars and public transportation, which society depends on. New technology focuses on producing energy sources that reduce the level of pollution, including renewable energy sources. In fact, it is now reported that this accounts for 25% of total energy generation, in comparison with just 5% in 2006.
The energy market covers a number of products, including oil and gas, renewable energy and electricity. There are also many different stages within the process of trading energy, such as the development, production and shipment of the product. Energy commodities such as crude oil are often sold on wholesale markets, whereas electricity sales usually come from a direct power plant that is owned by a producer. It is common to trade these securities with futures (forward contracts) or options, while energy stocks are exchanged like any other via a stock exchange.
