Energy market is one of the most important market for a country`s growth and development. It is the people of the country and their standard of living that determines a country`s status and position in the market. It is the purchasing power of the citizens that determines their economic richness. Energy trading in simple terms is nothing but the trading of essential energy generating resources like oil, natural gas, petroleum etc between different countries. It is the buying and selling of these and reaching them from the place of availability to the place of scarcity. This exchange happens between countries on some rules and regulations that are laid down in the form of an agreement that speaks about the value, the quantity, quality, date of manufacture and date of expiry. These things are strictly tested before it is being purchased from one corner and exported to the other.
Factors affecting the energy market and trading
Like the other types of market, the energy market is also highly volatile. Such trading between countries or states becomes necessary for the equal distribution of available natural resources across the globe. The demands and requirements for the living of the people of any country is the same and it is important for all of them to have some of the basic, essentials for living. Now, it is for this reason that there are trades between countries. But there are few factors that have a great impact on this exchange and some of the major ones are;
Political factors – when there is a change in the governments or positions, there might be a great change in the procurement of energy resources from other countries. The policies and regulations might change from one reign to the other and hence there might be drastic changes in the exchange policies between the countries in the energy market on http://www.xglobalmarkets.com/accounts/islamic-account/.
Natural factors – when there is a change in the weather or climatic conditions there, they might act as a great barrier to the energy market. Climatic conditions affect the import and export of these resources from one end to the other.
These two are the major factors that have to be taken into consideration while framing policies and regulations regarding the energy market and trading.
Renewable energy- the future of energy market
The cost of import and export of natural resources from one place to the other is always high since there is a heavy demand from all parts of the world. This inturn increases the cost to the end consumer. And most of these energy resources are considered heavy pollutants to the greenery of the planet. So the world is slowly shifting its preferences from such resources to the renewable resources which are relatively easy to obtain and are also safe and best for use. They are direct from nature and hence do not pollute it and help Mother Nature to stay in its greenery forever. Some of the renewable energy sources are solar power, wind power and hydro electric power. These are some of the replenishing resources from where power can be generated continuously unless there is a drastic change in the climatic conditions.
Importance of Energy Market
The most important necessity for energy market is for the consumption and production of electricity which is a must for one and all. With improvement in technology, we have gadgets and devices taking up most of our routine work which demands for more consumption of power and electricity. So the demand for this keeps increasing day by day and it has become a great challenge for the world to match this demand with the supply from the available resources.
It is during this hunt that the importance of renewable sources of energy was found which are replenished naturally. There is never a dearth in their availability since they are naturally available. The future generations will definitely require more power and energy and it is definitely a challenging situation for each and every country to face the need. But now with various diversified options, there are new ways of generating this required power energy and using them wisely would help with power and supply for the present as well as future generations.