Energy
Energy & Natural Gas: What They Are and Where to Buy
Energy is the input cost of everything else in the economy. Here's how oil, gas and fuel markets work — and the practical ways to get exposure.
What are energy commodities?
Energy commodities are the raw fuels that power transport, industry, heating and electricity generation. The most actively traded are crude oil (Brent and WTI), natural gas, gasoline, heating oil / gasoil and, increasingly, carbon allowances and electricity contracts.
Crude oil: Brent vs WTI
Brent is the seaborne, waterborne benchmark used for roughly two-thirds of global crude pricing. WTI is the US benchmark, delivered at Cushing, Oklahoma. The spread between them reflects transport costs, US export capacity and regional supply shocks.
Natural gas: the most volatile major commodity
Natural gas heats homes, powers industry and generates a large share of electricity. Prices are highly regional because gas is expensive to move: Henry Hub sets the US benchmark, while TTF in the Netherlands is the European reference and JKM serves Asian LNG. Weather, storage levels and pipeline or LNG disruptions can move prices double digits in a single session.
What drives energy prices?
- Supply decisions — OPEC+ production quotas, US shale drilling activity, refinery outages.
- Demand cycles — industrial output, air travel, driving season, winter heating demand.
- Weather — the dominant short-term driver for natural gas.
- Geopolitics — conflicts, sanctions and shipping chokepoints such as Hormuz and Suez.
- Inventories — weekly crude and gas storage reports routinely move markets.
- The US dollar — energy is priced in dollars, so a stronger dollar tends to weigh on prices.
- Energy transition — renewables, EV adoption and carbon pricing reshape long-run demand.
Where can you buy energy exposure?
- Futures contracts — CME/NYMEX (WTI, Henry Hub) and ICE (Brent, TTF, gasoil). Direct and liquid, but leveraged, with expiry and rollover to manage.
- ETFs and ETCs — commodity funds that track oil or gas prices without a futures account. Note that roll costs can cause long-term tracking drift.
- Energy equities — producers, refiners, pipeline operators, LNG shippers and utilities, bought through any normal broker.
- CFDs with regulated brokers — flexible position sizing, but leveraged and unsuitable for long-term holding.
- Options — used to define risk or hedge an existing position.
Contango, backwardation and roll cost
Futures curves are rarely flat. In contango, later contracts cost more, so a fund rolling positions forward loses value over time. In backwardation, the opposite is true. This is the main reason a long-term oil ETF can lag the headline spot price.
Risks
Energy is one of the most volatile asset classes: prices are exposed to weather, politics and supply shocks that no analysis can predict. WTI famously settled at a negative price in April 2020. Leverage magnifies these moves — size positions accordingly.
Live Brent, WTI, natural gas and refined product prices are on the NexPrices commodities and energy page.