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Mind and markets

Lesson 100 · Written for kid, teen, and little

Oil, Wheat and Gold

Oil, wheat and gold are raw materials, and their prices can jump around.

The idea

A commodity is a raw material like oil, wheat, gold or copper. One barrel of oil is basically the same as another barrel, so buyers mostly compare on price. Prices move when supply or demand changes: a bad harvest, a new oil field or a sudden rush of buyers can swing them quickly. Because of that, commodity prices tend to be bumpier than the prices of many other things people invest in. 🛢️

A

Words to know

5

Commodity

A raw material like oil, wheat or gold, where one unit is much like another.

Raw material

Stuff that gets grown, dug up or pumped before anything is made from it. Wheat, copper and oil are raw materials.

Supply

How much of something is available to buy. A good harvest means lots of wheat and usually a lower price.

Demand

How much of something people want to buy. A cold winter pushes up demand for heating oil.

Barrel

The unit oil is measured and priced in. One barrel is about 159 litres, and news reports quote the price per barrel.

Try it — no accountTrue or false

True or false about commodities?

Card 1 of 4

Oil, wheat, gold and copper are all commodities.

Swipe the card — or tap.

In the full lesson

  1. 1True or false
  2. 2Put it in order
  3. 3Make the call

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