Commodities are not always produced close to where there is demand. Physical traders act as distributors, supplying clients and moving products around the world. Most of the world’s oil is produced in the Middle East, whilst most of the demand is in Asia.
The balance between supply and demand in energy and commodity products can be affected by many factors. In the longer term, demand trends are driven by economic conditions, technological advances or changes in government policy.
In the short term, weather or political...
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