What are oil futures?

Many major listed companies in globally significant stock exchanges like the New York Stock Exchange and London Stock Exchange are oil producers, and the movement in oil prices affects the indices of stock exchanges as well.

Oil futures are contracts in which traders agree to take the delivery of the crude oil on a fixed date in exchange for a set price of the contract. Oil futures are traded in a similar way to other futures contracts in the stock exchange, and the position could be sold out at any time before the expiry date of the contract.

Well just like the futures contracts of other commodity and stocks, there are traders who take short and long positions for oil futures. Back in March 2021, crude oil prices surged up to 6% when the merchant ship Ever Given was stuck in the middle of the Suez Canal, obstructing the water traffic from both sides.





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