Crude Oil Futures and Term Structure
NYMEX WTI, ICE Brent; contango and backwardation; calendar spreads and inventory signals
Crude Oil Futures and Term Structure
Executive Summary
Oil fundamentals determine the direction of prices over months and years; crude oil futures provide the instruments to lock in prices, add exposure, or hedge downside. A futures contract is a standardised agreement to buy or sell a fixed quantity of crude at a set price on a future date. This module maps the crude oil futures landscape—WTI and Brent specifications, basis and forward curve, seasonal patterns, roll mechanics, and hedging applications—and shows how to use futures strategically. For practitioners and consultants, it supports hedging design and trading decisions.
Learning Objectives
By the end of this module you will be able to understand crude oil futures contract specifications and trading mechanics, calculate basis between spot and futures prices, analyse forward curve structure (contango vs backwardation), evaluate seasonal patterns in crude oil futures, and model hedging strategies using futures contracts.