1, the relationship between supply and demand

The relationship between supply and demand is the main reason for the rise in oil prices. When global crude oil production can't keep up with demand, that is, when supply exceeds demand, oil prices will rise.

2. US dollar index

The dollar index is inversely proportional to the oil price, that is, when the dollar index weakens, funds will flow from the dollar market into the crude oil market, thus stimulating the rise of crude oil and driving the oil price to rise.

3. Economic development

When the economy recovers or develops rapidly, it will increase the consumption and demand of crude oil and stimulate the rise of oil prices.

4, the influence of the war

When the war breaks out, it will increase the demand for crude oil, affect the output of crude oil, and hedge funds will flow into the crude oil market, leading to an increase in oil prices.

5. Policy implications

In the main crude oil producing areas, the introduction of relevant policies to reduce or restrict crude oil exports will lead to an increase in oil prices to a certain extent.

After several years of development, the three basic functions of the oil futures market have been basically possessed.

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 relative benchmark price will also change due to changes in 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, so that the production and operation costs or expected profits remain 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 satisfy speculation. Capital has a natural speculative demand. Using the oil futures market can attract a lot of funds, thus providing impetus for the development of the oil industry.

Introduction of light crude oil on New York Futures Exchange

(Light sweet crude oil-the New York Mercantile Exchange)

Due to the strength of American super crude oil buyers and the influence of New York Futures Exchange itself, crude oil futures trading based on WTI has become the leader in global commodity futures trading volume.

Generally speaking, crude oil futures contracts have good liquidity and high price transparency, and are one of the three benchmark prices in the world crude oil market. When the public and the media usually talk about how many dollars the oil price has exceeded, it mainly refers to this price.

Among oil futures contracts, oil futures is the most traded variety.

There are three kinds of crude oil futures contracts with the largest trading volume and the widest influence in the world:

The New York Mercantile Exchange (NYMEX) light sweet crude oil is WTI (West Texas Intermediate) futures contract, London International Petroleum Exchange (IPE) Brent (North Sea Brent) futures contract and Singapore International Finance Exchange (SIMEX) DUBAI futures contract.

Other refined oil futures products include distillate oil, unleaded gasoline, gas oil, heating oil, fuel oil and light diesel oil.

International crude oil physical transaction mainly adopts the pricing method of benchmark price+/-discount, and futures trading prices such as WTI, Brent and Dubai are often used as benchmark prices.