Business

Is Green Tech Changing the Commodity Market as We Know it?

<p style&equals;"text-align&colon; justify&semi;">While BP’s recent suggestions that fossil fuels will <a href&equals;"https&colon;&sol;&sol;www&period;edie&period;net&sol;news&sol;6&sol;BP-Energy-Outlook-2016-renewable-energy-fossil-fuel-emissions-2035&sol;" target&equals;"&lowbar;blank" rel&equals;"noopener">reign supreme for the next two decades<&sol;a> have been met with cynicism by commentators&comma; this assertion is largely uncontested by the majority of leading energy firms&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">However&comma; there’s no doubt that <a href&equals;"https&colon;&sol;&sol;newsforpublic&period;com&sol;benefits-of-using-solar-energy&sol;">green energy<&sol;a> alternatives are becoming increasingly commonplace and affordable in the marketplace&comma; with this transition having a seismic impact on everything from climate change to the investor traditional commodities demand&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">We’ll explore this further below&comma; while asking if green assets and ETFs are likely to dominate the attention of investors in the future&period;<&sol;p>&NewLine;<h2>How Have Traditional Commodities Fared During the Last Decade&quest;<&sol;h2>&NewLine;<hr &sol;>&NewLine;<p style&equals;"text-align&colon; justify&semi;">If we cast our mind back 12 years&comma; traditional commodities such as oil were at the peak of an upward trend that had begun in earnest in 2002&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">At this time&comma; most commodities began to make incremental gains in value&comma; with this sustained rally intensifying in late 2007 and just prior to the global recession&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Oil embodied this trend better than any other commodity&comma; hitting an incredible intraday high of &dollar;147 per barrel in July 2008&period; However&comma; these substantial gains evaporated as the financial crisis unfolded&comma; with the most traded commodities quickly slumping to their lowest price points since the early noughties&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">The commodities market has arguably never fully recovered from this seismic setback&comma; while it has certainly been gripped by significant volatility in the years since&period; In fact&comma; only staple food assets such as sugar and cocoa have enjoyed sustained growth during the last decade or so&comma; <a href&equals;"https&colon;&sol;&sol;www&period;cnbc&period;com&sol;id&sol;34524382" target&equals;"&lowbar;blank" rel&equals;"noopener">posting impressive gains of 316&percnt; and 288&percnt; respectively<&sol;a>&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">In the case of headline commodities like oil&comma; there’s no doubt that continued uncertainty has been further compounded by the rise of renewable energy sources&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">This has certainly caused the global demand for oil to fall substantially in recent years&comma; while a constantly rising supply line has also sent prices plunging to record lows&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">This has been particularly evident recently&comma; with the collapse of the OPEC&plus; agreement &lpar;which had sought to cap production across the globe&rpar; and a subsequent price war between Russia and Saudi Arabia <a href&equals;"https&colon;&sol;&sol;oilprice&period;com&sol;Energy&sol;Oil-Prices&sol;Oil-Rebounds-6-After-Historic-Loss&period;html" target&equals;"&lowbar;blank" rel&equals;"noopener">triggering the worst marketplace rout since 1991<&sol;a>&period;<&sol;p>&NewLine;<h2>What Green Commodities are Filling the Void&quest;<&sol;h2>&NewLine;<hr &sol;>&NewLine;<p style&equals;"text-align&colon; justify&semi;">If we assume that oil is no longer the viable commodity for investors that it once was&comma; the question that remains is which green assets and commodities are emerging to fill the void&quest;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Interestingly&comma; we’ve seen a significant investment opportunity emerge in water of late&comma; with issues caused by contamination and dwindling natural resources causing a shortage across the globe&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">In fact&comma; research has found that even 20 European nations depend on other countries for more than 10&percnt; of their water resources&comma; while five of these &lpar;namely Hungary&comma; Moldova&comma; Romania&comma; and Luxembourg and the Netherlands&rpar; rely on rivers that flow from neighbouring counties to supply more than 75&percnt; of their total resource&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Subsequently&comma; there’s a clear opportunity to invest in firms that collect&comma; clean and distribute water globally&comma; particularly in the form of ETFs that offer access to a wide range of stocks&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">These include popular exchanges such as the Invesco Water Resource Portfolio and First Trust ISE Water Fund&comma; which can be easily accessed through brokerage sites such as <a href&equals;"https&colon;&sol;&sol;www&period;oanda&period;com&sol;uk-en&sol;trading&sol;" target&equals;"&lowbar;blank" rel&equals;"noopener">Oanda<&sol;a> and may offer incremental gains over a period of time&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">When considered alongside individual water stocks and the investment opportunities that exist in renewable energy such as solar and wind&comma; these ETFs hint at the future direction of the commodities market over the course of the next decade or so&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">They also serve as a timely reminder for commodity investors to reconsider their portfolio in the modern age&comma; with diversification key even if fossil fuels such as oil are likely to remain dominant for the foreseeable future&period;<&sol;p>&NewLine;

Hardik Patel

Hardik Patel is a Digital Marketing Consultant and professional Blogger. He has 16+ years experience in SEO, SMO, SEM, Online reputation management, Affiliated Marketing and Content Marketing.

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