The first is price discovery. There are many commodity producers, operators and speculators in the futures market. They trade and influence each other on the basis of production cost plus expected profit. Traders analyze and predict the future price of commodities, and form the expected benchmark price of oil through organized public bidding. This relatively authoritative benchmark price will also change due to the change of market supply and demand, which has certain dynamic characteristics. The futures price formed in the process of open competition and bidding is often regarded as the reference price of the international oil spot market, which has an important price-oriented function and can guide enterprises to make their production and operation more market-oriented and improve the efficiency of social resource allocation.
The second is to avoid risks. Hedging is one of the basic operating modes of the oil futures market. Enterprises can achieve risk procurement through hedging, which can keep production and operation costs or expected profits relatively stable, thus enhancing their ability to resist market price risks. The basic way of hedging is for enterprises to buy or sell oil commodity futures contracts with the same transaction amount but opposite direction in the spot market, and offset the actual price risk brought by the price change in the spot market at a certain time in the future by hedging or liquidation compensation. Of course, because the difference between spot price and futures price is objective, hedging cannot completely eliminate the risk, but replaces the greater risk with smaller risk, and replaces the risk of spot price change with the risk of spot price difference and futures price difference.
The third is to regulate speculation. Capital has a natural speculative demand. Using the oil futures market can attract a lot of funds, thus providing the first driving force for the development of the oil industry. Using the futures market, traders can avoid the negative impact of international oil price fluctuations on the one hand; On the other hand, we can get more benefits from market price fluctuations through speculative trading. In a standardized market, speculation is strictly supervised and managed. Speculators get normal economic benefits in strict compliance with trading rules. Supervision and management make speculation a tool to regulate the futures market. With the participation of speculators, the trading volume in the futures market increases, and the relationship between supply and demand in the market can be better regulated.