With Shenton Energy Asia, you now have the opportunity to invest in crude oil, one of the world’s most sought-after commodities. So what exactly is crude oil?
What Is Crude Oil?
Crude oil, more commonly known as petroleum, is refined into hundreds of products such as gasoline, diesel, jet fuel, natural gas, heating oil, kerosene, asphalt, lubricants and liquid petroleum gases such as butane and propane. The byproducts of crude oil are also used to produce many different types of plastics, waxes, chemicals and pharmaceutical products.
Globally, an average of more than 87 million barrels of crude oil and natural gas liquids are traded everyday. And this demand will continue to rise as we see many countries like China and India that are developing at rapid speed, in terms of population and economic growth.
As consumers, we are very dependent on crude oil that has been refined into petrol and diesel because they power our cars and buses that we use to commute from place to place everyday. And with increasing demand of crude oil faster than supply can cope, it is no wonder that many countries are also looking at alternative sources of energy, such as bio-fuel.
How Is Crude Oil Traded?
Crude oil is traded from one party to another, and can take place anywhere along the petroleum value chain.
Just like in the case of your crude oil investment with our principal, this is how the trade flow goes:
- Asian customers buy into the existing oil reserve of Canadian Oil & Gas company
- Canadian Oil & Gas company undertakes to sell customers’ oil to her existing end-customers like BP, Shell, Nexen, etc.
- When BP, Shell, Nexen, etc pays 90 days after the sale of oil, the Canadian Oil & Gas company in return pays Asian customers 3% of the purchased amount
- This buy & sell cycle repeats for 12 cycles