It is good to know that there are more other forms of investment besides stocks, bonds, mutual funds, and gold – the energy sector. Investing in energy sector is always growing in demand as it is an intangible and will never run out. Experts say that the use of energy is always assumed to grow, and as an individual with income, you investing in the energy sector will solidify your future while you are earning an income. But what are reasons why energy is a good area to invest into?
Energy is valued around the world at $7 trillion, considering it to be the most valuable segment in the market on the planet. The delivery of energy’s usable forms to the entire population in the world makes up ten percent of the annnual gross domestic product of the world.
Looking at 10 of the world’s companies that has the highest annual revenue shows that nine of them are operating in the energy sector. This is because the market is very pervasive. It is needed by every humanity’s day to day activity. Since this market generates more revenue compared to any other industry, it is considered to be a premium place where you can store your investment.
Another reason is the energy’s future growth – based on the statement by the International Energy Agency, the energy’s demand is expected to grow over thirty percent by the year 2035. By that time, the global demand for oil will hit about a hundred million barrels each day, as the amount of cars running on the streets are expected to double that year.
The prices are expected to rise, too, at $125 each barrel. The electricity’s demand is forecasted to grow as well, twice as faster as today’s consumption on energy, which will lead the prices to go as high as 15 percent by the very same year.
In order to meet with the steady rise of demands in investing in energy sector, the world should invest around $37 trillion in the related supply and production infrastructure all over the energy industry’s sector for the next twenty years. More than half of that, about $19 trillion, is required by the gas and oil sector for production, transportation and exploration will increase.
The rest will be directed toards the electrity sector, slated to be around $17 trillion of investment for upgraded renewable generation and natural gas, including the upgraded distribution and transmission network which will maximize its efficiency.
Diversity is an added reason why there is a steady rise and demand for investing in the energy sector – the energy market is so big that it is associated with diverse area of different sectors in the market. Nuclear energy, coal, gas and oil is just scratching the surface of the offerings of this market.
Other sectors like biofuels requires the input of crops, so investing in energy is also considered investing in agriculture. Most of the plants that generate electricity will require any other source, and will need water in order to get cooled down, which is considered water investing. In other cases such as clean technologies like solar energy, revenue and investments resemble more on the semiconductor market, which is considered technology investing.
The income and growth with investing in energy sector is astonishing. It allows all individuals investing in this sector to pursue different goals in investment. You will need to define the kind of strategy that you are going to employ in order to accomplish the most appropriate goal suited to your current economic situation. And when you do, investing in the energy sector will aid you in accomplishing it.