What are crude oil futures?

Crude oil futures on the New York Mercantile Exchange (NYMEX) are the world's most actively traded futures contract on a physical commodity. Because of its excellent liquidity and price transparency, the contract is used as a principal international pricing benchmark. The NYMEX also offers trading in heating oil futures and gasoline futures.

Crude oil futures provide individual investors with an easy and convenient way to participate in one of the world's most important commodity markets. In addition, a broad cross-section of companies in the energy industry-from those involved in exploration and production to refiners-can use crude oil futures contracts to hedge their price risk. Light, sweet crude is preferred by refiners because of its low sulfur content and relatively high yields of gasoline, diesel fuel, heating oil, and jet fuel. Even companies that are substantial consumers of energy products can use crude oil futures to protect against adverse price fluctuations.
 

Start trading crude oil futures for just $2.25 per contract pricing.

How to trade crude oil futures

Crude oil futures are 1,000 barrels per contract, traded from 6:00 p.m. U.S. until 5:00 p.m. U.S. ET, all months of the year. However, you can trade more than just NYMEX crude oil futures online with Schwab. We also offer Brent crude oil futures as well as E-mini crude oil futures, which are just 50% of the size of a standard futures contract. E-mini crude futures trade exclusively on the Chicago Mercantile Exchange's Globex® platform nearly 24 hours per day. 

Crude oil futures contract specifications

Considering trading crude oil futures? Here are the crude oil futures contract specifications.

Crude oil futures contract specifications
Exchange New York Mercantile Exchange, CL
Contract Size 1,000 Barrels
Minimum Tick Size and Value 0.01 per barrel, worth $10.00 per contract.
Trading Times Electronic trading of crude oil futures is conducted from 6:00 p.m. U.S. until 5:00 p.m. U.S. ET via the CME Globex® trading platform, Sunday through Friday.
Principal Trading Months Crude oil futures contracts trade every calendar month, from January through December.

At Schwab, you get access to specialize trading tools and resources, such as real-time crude oil futures quotes, timely research and education, and other helpful insights.

Why trade crude oil futures?

Companies that produce or consume crude oil can manage price risk by using crude oil futures as hedge to lock in the price for the crude oil — the selling price if they produce it or the buying price if they consume it. Investors can also use crude oil futures to hedge against investments in their portfolio that may be sensitive to crude oil price changes.

Investors and traders can use crude oil futures to speculate on the future price of crude oil and can be used as an alternative to oil and gas stocks. Crude oil prices can change due to a number of factors but primarily from the perceived changes in supply and demand that comes from both overall output worldwide and the economic health of the industry’s major consuming countries.

It is important to understand the benefits and risks involved with crude oil futures before placing a futures trade. Compared to traditional investments, with crude oil futures you can trade nearly 24 hours a day during the trading week and take advantage of trading opportunities regardless of market direction. Crude oil futures also provide the ability to trade with greater leverage and allow a more efficient use of trading capital. However, trading leveraged products like crude oil futures also involves the risk that losses can exceed the amount originally invested and may not be suitable for all investors.

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