Benchmark oil futures contract
How are oil futures prices determined?
Crude oil prices are driven by global supply and demand.
Economic growth is one of the biggest factors affecting petroleum product—and therefore crude oil—demand.
Growing economies mean a higher demand for energy, in general, especially for transporting goods from producers to consumers..
Is WTI crude oil a benchmark contract on?
West Texas Intermediate (WTI) is a light, sweet crude oil that serves as one of the main global oil benchmarks.
It is sourced primarily from inland Texas and is one of the highest quality oils in the world, which is easy to refine.
WTI is the underlying commodity for the NYMEX's oil futures contract..
What are the benchmarks for oil futures?
Two of the most important crude oil futures benchmarks are Brent, which trades on the Intercontinental Exchange (ICE) in London, and West Texas Intermediate (WTI), which trades on the New York Mercantile Exchange (Nymex) in New York..
Why is Brent used as a benchmark?
The Brent benchmark is used to price over three-quarters of the world's traded oil, as one of the most liquid crude grades.
The waterborne crude oil on which ICE's Brent benchmark is based has access to global shipping, port and storage capacity..
- A benchmark crude or marker crude is a crude oil that serves as a reference price for buyers and sellers of crude oil.
There are three primary benchmarks, West Texas Intermediate (WTI), Brent Blend, and Dubai Crude. - The Benchmark Futures Contract is the futures contract on natural gas as traded on the New York Mercantile Exchange (the “NYMEX”) that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next
- The Brent benchmark is used to price over three-quarters of the world's traded oil, as one of the most liquid crude grades.
The waterborne crude oil on which ICE's Brent benchmark is based has access to global shipping, port and storage capacity.
West Texas Intermediate is the underlying commodity of the New York Mercantile Exchange's oil futures contract and one of the main global oil benchmarks. Brent blend is a type of sweet crude oil that is used as a benchmark for the prices of other crude oils.
Benchmark crude oil establishes an initial price reference. Investors use the benchmark as a baseline when evaluating and trading individual crude oil varieties
Over time, Brent in the North Sea evolved as the global benchmark — the oil price for all to see. Brent is “the price of oil.” It is the Brent price that allows other grades in various regions to determine their own value quickly, based on price relationships that different grades have established over time.
The benchmark makes it easier for traders, investors, analysts, and others to determine the prices of multiple grades of crude oil varieties and blends. Benchmark crude oil primarily tracks these three main types of oil. They are West Texas Intermediate, Dubai crude, and North Sea Brent crude.
Used properly, futures are a powerful way to increase capital efficiency and exposure. The world's benchmark commodities. GET COST-EFFICIENT COMMODITIES ACCESS,
How Oil Futures Work
Oil futures contracts play a key role in global markets and are based on cash market oil prices, meaning the price of physical oil being delivered to a certain destination.
Oil futures allow suppliers and buyers of physical oil to hedgethe cost of their deliveries, protecting them from price fluctuations.
For instance, a crude oil producer in June .
Reasons For The Change
Falling supplies of North Sea crude have made Brent prices less reflective of the entire global market.
Daily trade volume of the five types of North Sea crude composing the Brent basket has fallen 18% in the past two-and-a-half years.
Meanwhile, Texas oil makes up more of the global oil trade than ever before.
Russia's invasion of Ukraine and subs.
Launched by the Dubai Mercantile Exchange (DME) on 1 June 2007, the DME Oman Crude Oil Futures Contract (OQD) is the Asian crude oil pricing benchmark.
The contract is traded on the CME Group’s electronic platform CME Globex, and cleared through CME Clearport.
The International Exchange, now ICE Futures, based in London, was one of the world's largest energy futures and options exchanges.
Its flagship commodity, Brent Crude was a world benchmark for oil prices, but the exchange also handled futures contracts and options on fuel oil, natural gas, electricity, coal contracts and, as of 22 April 2005, carbon emission allowances with the European Climate Exchange (ECX).
Commodity exchange in Kish, Iran
The Iranian Oil Bourse, International Oil Bourse, Iran Petroleum Exchange Kish Exchange or Oil Bourse in Kish also known as Iran Crude Oil Exchange, is a commodity exchange, which opened its first phase on 17 February 2008.
The city of Cushing in Oklahoma is a central hub within the United States and worldwide oil industry.
It connects major pipelines within the United States and is the location where the oil futures contracts end up being delivered.
Launched by the Dubai Mercantile Exchange (DME) on 1 June 2007, the DME Oman Crude Oil Futures Contract (OQD) is the Asian crude oil pricing benchmark.
The contract is traded on the CME Group’s electronic platform CME Globex, and cleared through CME Clearport.
The International Exchange, now ICE Futures, based in London, was one of the world's largest energy futures and options exchanges.
Its flagship commodity, Brent Crude was a world benchmark for oil prices, but the exchange also handled futures contracts and options on fuel oil, natural gas, electricity, coal contracts and, as of 22 April 2005, carbon emission allowances with the European Climate Exchange (ECX).
Commodity exchange in Kish, Iran
The Iranian Oil Bourse, International Oil Bourse, Iran Petroleum Exchange Kish Exchange or Oil Bourse in Kish also known as Iran Crude Oil Exchange, is a commodity exchange, which opened its first phase on 17 February 2008.
The city of Cushing in Oklahoma is a central hub within the United States and worldwide oil industry.
It connects major pipelines within the United States and is the location where the oil futures contracts end up being delivered.
