Crude oil futures are the most important oil futures. At present, there are four important crude oil futures contracts in the world: NYMEX's light and low sulfur crude oil West Texas Intermediate, London International Petroleum Exchange (IPE)' s Brent, Singapore Exchange (SGX)' s Dubai sour crude oil.
If you want to invest in international crude oil, you have three options:
1, the New York Mercantile Exchange crude oil, probably needs 10000 USD in one hand.
The New York Mercantile Exchange needs about 5000 dollars for small crude oil.
3. Brent crude oil of London International Petroleum Exchange needs about 10000 USD.
The margin is calculated according to 10%, because the margin ratio of different platforms will be different.
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 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.
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.