If you fall into the former category then in all candor your best play is probably to sell short crude
oil futures contracts as they offer the most direct play on a bearish scenario for crude oil.
Not exact matches
The energy market could have a new benchmark
oil price when Dubai launches its Middle East sour crude
futures contract as an alternative to New York's NYMEX light crude
oil futures and London's IPE Brent crude
oil.
CNBC's Jackie DeAngelis reports on commodities
as several options and
futures contracts expire Friday, and the factors supporting the price of
oil.
The Shanghai
oil futures contract is similarly designed to wrest some control over pricing from the main benchmarks in New York and London — West Texas Intermediate (WTI) and Brent — and to promote the use of the yuan, also known
as the renminbi.
Local media have reported that China could launch a crude
oil futures contract priced in yuan
as early
as Jan. 18, although analysts and industry executives who spoke to Breakingviews believe a later start is more likely.
NYMEX crude
oil is the largest
oil futures contract in the world and has a current total open interest of around 1.6 million
contracts and it would be impossible for any group of speculators to sell or buy 53 days of world production in a year or longer, no less in a week
as just occurred in COMEX silver.
During this same period, activity on the crude
oil futures market —
as measured by the number of
contracts outstanding, trading activity, and the number of traders — has increased significantly.
While the official goal of the new
futures contract is to establish a regional benchmark for more useful pricing of the crude grades prevalent on the Chinese market, analysts see the yuan
oil futures as a step toward China seeking wider acceptance of its currency in global trade, including the
oil trade, and establishing a petro - yuan that could challenge, in the
future, the dominance of the petrodollar.
OPEC, especially its Middle Eastern producers, will be closely watching the
futures contract because once established, the Chinese reference crude price could act
as a regional benchmark for negotiations of spot or term crude
oil prices.
Crude
oil futures in the June
contract settled last Friday in New York at 67.33 a barrel while currently trading at 68.35 up about a $ 1 for the trading week hitting a 3 1/2 year high & in yesterdays trade prices went up
as high
as 69.55 before profit - taking ensued.
As the yuan progressively reaches full consolidation in trade settlement, the petro - yuan threat to the US dollar, inscribed in a complex, long - term process, will disseminate the Holy Grail: crude
oil futures contracts priced in yuan fully convertible into gold...
The first
futures contracts were for commodities such
as wheat and corn, and they're available for many commodities now, including
oil and natural gas.
Investors who buy ETFs that use commodity
futures contracts are sometimes surprised to see that the ETF does not move in lockstep with the price of the commodity
as seen in the news,
oil being a good example.
The crude
oil ETF, which invests in
futures contracts, trades near its 10 - year low price of $ 10.48
as of Oct. 18, 2017, after peaking at more than $ 100 on Jan. 1, 2008.
As an example, airlines are well known to protect themselves against significant rises in crude
oil prices, by buying a
futures contract today with a specified price and delivery date in the
future, on the assumption that
oil prices will be on the rise over the period in question.
Perhaps surprisingly, until only about forty years ago, trading
futures markets consisted of only a few commodity farm products, however, now they have been joined by a huge number of tradable financial and other tradable products such
as precious metals like gold, silver and platinum; livestock such
as hogs and cattle; energy
contracts such
as crude
oil and natural gas; foodstuffs like coffee and orange juice; and industrials like lumber and cotton.
Get updated information of Crude
Oil Futures Prices, Quotes, Charts, contract specification as well as on futures contract, stock futures, energy f
Futures Prices, Quotes, Charts,
contract specification
as well
as on
futures contract, stock futures, energy f
futures contract, stock
futures, energy f
futures, energy
futuresfutures.
The investment seeks to replicate, net of expenses, the daily changes in percentage terms of the spot price of Brent crude
oil as measured by the changes in the price of the
futures contract on Brent crude oil as traded on the ICE Futures Ex
futures contract on Brent crude
oil as traded on the ICE
Futures Ex
Futures Exchange.
And in markets
as volatile
as oil, entering a
futures contract is often the best bet in protecting your investment.
For example: 5,000 bushels of corn, 1,000 barrels of crude
oil or Treasury bonds with a face value of $ 100,000 are all
contract sizes
as defined in the
futures contract specification.
A
futures contract is a financial instrument on the value of a commodity such
as corn, crude
oil, gold, or coffee.
Key takeaways include: Looking at commodities,
Oil,
as measured by WTI
futures contracts, has bounced from Read more -LSB-...]
The first
futures contracts were negotiated for agricultural commodities, and later
futures contracts were negotiated for natural resources such
as oil.
USO also invests in
oil via
futures contracts and
as such suffers from having to pay a premium for the time value of the
contract, this is known
as cantango.
The contango exhibited in Crude
Oil in 2009 explains the discrepancy between the headline spot price increase (bottoming at $ 35 and topping $ 80 in the year) and the various tradeable instruments for Crude
Oil (such
as rolled
contracts or longer - dated
futures contracts) showing a much lower price increase.
The buyer of the
contract can settle for the product itself such
as oil barrels or liquid cash when the
future contract comes to an end.