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How does the physical storage and transportation of commodities impact their price?

Curious about commodities

How does the physical storage and transportation of commodities impact their price?

The physical storage and transportation of commodities can impact their price in several ways. Firstly, the cost of storage and transportation can add to the overall cost of the commodity, which can affect its price. For example, if it is expensive to store and transport a certain commodity, such as crude oil, then the price of the commodity may be higher to reflect these costs.

Secondly, the availability of storage and transportation infrastructure can also affect the price of commodities. If there is limited storage or transportation capacity for a particular commodity, then this can lead to price volatility, as the market struggles to balance supply and demand.

Finally, disruptions to transportation infrastructure, such as natural disasters or geopolitical events, can also impact the price of commodities. For example, a major storm in a key shipping lane could cause delays in the delivery of a commodity, leading to a shortage and higher prices.

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