Crude Oil Futures

Crude Oil Futures Perhaps the most controversial debate of our age is the amount of oil we have left to pump from the earth. Some speculate as many as hundreds of years while others say we may experience an output shortage as early as 2015. On top of this, many speculate that OPEC purposefully manages the outflow of major oil supplies in order to maintain high prices in the markets. The two major types of crude oil that traders and speculators focus on today are Brent crude and West Texas Intermediate (WTI). The WTI crude is used as a benchmark in oil pricing, is most cited in oil prices, and is a very light crude oil. Brent crude, on the other hand, comes from the North Sea, is not light like WTI crude, and prices two-thirds of internationally traded crude oil.

Crude Oil Contract Specifications
Product SymbolCL
VenueCME Globex, CME ClearPort, Open Outcry (New York)
Trading HoursCME Globex: Sun–Fri 5:00pm–4:15pm CT with a 45-minute break each day beginning at 4:15pm
CME ClearPort: Sun–Fri 5:00pm–4:15pm CT with a 45-minute break each day beginning at 4:15pm
Open Outcry: Mon–Fri 8:00am-1:30pm CT
Contract Unit1,000 US barrels (42,000 gallons)
Pricing UnitU.S. Dollars and Cents per barrel
Minimum Fluctuation$0.01 per barrel
Maximum Daily Price FluctuationInitial Price Fluctuation Limits for All Contract Months. At the commencement of each trading day, there shall be price fluctuation limits in effect for each contract month of this futures contract of $10.00 per barrel above or below the previous day’s settlement price for such contract month. If a market for any of the first three (3) contract months is bid or offered at the upper or lower price fluctuation limit, as applicable, on Globex it will be considered a Triggering Event which will halt trading for a five (5) minute period in all contract months of the CL futures contract, as well as all contract months in all products cited in the Associated Products Appendix of rule 200.06. Trading in any option related to this contract or in an option contract related to any products cited in the Associated Products Appendix which may be available for trading on either Globex or on the Trading Floor shall additionally be subject to a coordinated trading halt.
Termination of TradingTrading in the current delivery month shall cease on the third business day prior to the twenty-fifth calendar day of the month preceding the delivery month. If the twenty-fifth calendar day of the month is a non-business day, trading shall cease on the third business day prior to the last business day preceding the twenty-fifth calendar day. In the event that the official Exchange holiday schedule changes subsequent to the listing of a Crude Oil futures, the originally listed expiration date shall remain in effect. In the event that the originally listed expiration day is declared a holiday, expiration will move to the business day immediately prior.
Listed ContractsCrude oil futures are listed nine years forward using the following listing schedule: consecutive months are listed for the current year and the next five years; in addition, the June and December contract months are listed beyond the sixth year. Additional months will be added on an annual basis after the December contract expires, so that an additional June and December contract would be added nine years forward, and the consecutive months in the sixth calendar year will be filled in.
Additionally, trading can be executed at an average differential to the previous day’s settlement prices for periods of two to 30 consecutive months in a single transaction. These calendar strips are executed during open outcry trading hours.
Settlement TypePhysical
Settlement ProcedureDaily NYMEX Energy Futures Settlement Procedure
Final NYMEX Energy Futures Settlement Procedure
Trading at Settlement (TAS)Trading at settlement is available for spot (except on the last trading day), 2nd, 3rd and 7th months and subject to the existing TAS rules. Trading in all TAS products will cease daily at 2:30 PM Eastern Time. The TAS products will trade off of a “Base Price” of 0 to create a differential (plus or minus 10 ticks) versus settlement in the underlying product on a 1 to 1 basis. A trade done at the Base Price of 0 will correspond to a “traditional” TAS trade which will clear exactly at the final settlement price of the day.
Trade at Marker (TAM)TAM trading is analogous to our existing Trading at Settlement (TAS) trading wherein parties will be permitted to trade at a differential that represents a not-yet-known price. TAM trading will use a marker price, whereas TAS trading uses the Exchange-determined settlement price for the applicable contract month. As with TAS trading, parties will be able to enter TAM orders at the TAM price or at a differential between one and ten ticks higher or lower than the TAM price. Trading at marker is available for spot month on the last trading day.
Light Sweet Crude Oil (CL) spot, 2nd and 3rd months and nearby/second month, second/third month and nearby/third month calendar spreads
No-Activity Periods:
4:30 p.m. London time – 5:50 p.m. Eastern time Monday – Thursday
4:30 p.m. London time Friday – 5:20 p.m. Eastern time Sunday
Exchange RulesThese contracts are listed with, and subject to, the rules and regulations of NYMEX.
Source: CME

Crude Oil Facts

Crude Oil is unprocessed oil that is acquired directly from the ground. It is also a fossil fuel that was made from the remains of decaying plants and aquatic animals in ancient seas. It wasn’t until the invention of the kerosene lamp that the demand for oil emerged. Crude oil futures represent the consummate commodity, as it is the most traded on the markets today. They are also the biggest contracts of a commodity in terms of volume. These crudes are favored because they can produce valuables, such as gas and diesel, due to low sulfur content.

The top producers of crude oil are Russia, Saudi Arabia, and the U.S. Even though the U.S. produces a substantial amount of crude oil, it must depend on imports in order to fulfill its energy demand. All the oil producing countries combined produce almost 75 million barrels of oil a day. Around 650 million barrels of oil have already been produced, but over a trillion barrels in reserves can still be produced as well. Cushing, Oklahoma is the delivery point of crude oil.

Source: Barchart

Last updated May 2013

Additional Info

Crude Oil News Articles

  • Labor day gas prices hit record low (8/28/2014) - The decline of crude oil futures has sent Labor Day gasoline prices to their lowest since 2010.
  • Oil futures end low after bearish week (8/22/2014) - According to Market Watch, on Friday, light, sweet crude futures for October delivery were down 24 cents, or 0.3 percent, to $93.73 a barrel on the New York Mercantile Exchange. 
  • U.S. crude rises ahead of expiration; Brent crude slides on China (8/21/2014) - On Wednesday, U.S. crude oil increased in choppy trading prior to he September contract's expiration. These gains were seen after government data showed crude stocks dropped last week in the United States.
  • Brent oil down despite overseas tensions (8/12/2014) - Brent oil dropped to a nine-month low on Tuesday as dealers ignored ongoing conflict in Iraq.
  • Crude oil falls amidst low demand (7/31/2014) - According to the U.S. Energy Information Administration, in the week ended July 25, U.S. oil stockpiles were down 3.7 million barrels, compared with market estimates of a 1.8 million-barrel drop.
  • Crude oil declines amidst low demands (7/28/2014) - Both the weak demand for crude oil in Europe and Asia and an abundant supply in the Atlantic basin have exceeded worries over political tensions in Ukraine and the Middle East, sending  Brent crude oil slipping below $108 a barrel on Monday.
  • China PMI data steadies crude oil futures (7/24/2014) - Light, sweet crude futures for delivery in September traded at $102.93 a barrel on the New York Mercantile Exchange and were down $0.18 in the Globex electronic session.
  • Oil futures hit three week high (7/23/2014) - Upon announcement that Libya's oil production has fallen, crude-oil futures rose to their highest in three weeks.
  • Crude oil futures fall as Libya aims to boost production (7/9/2014) - Crude oil futures dropped to their lowest levels in about four weeks on Wednesday as the world's biggest user prepares to release economic data about supplies, according to Bloomberg.
  • Crude oil futures drop after hurricane soaks East Coast (7/7/2014) - West Texas Intermediate crude oil futures marked a seventh-straight day of losses on Monday in the aftermath of a hurricane invading the Eastern Seaboard of the U.S. and cutting down on demand for the energy commodity, according to Bloomberg.

Crude Oil Blog Posts

  • An Early Entry for Today’s Breakout Setup in Crude Oil Futures (8/14/2014) - Crude oil futures had a breakout setup for today as Wednesday was an NR7 day. For a breakout trade I will often use the previous session high and low as breakout reference prices. However, with crude oil in a strong daily down trend I was interested in finding an early entry for a downside breakout.
  • 6/6 Pre-Dawn Update (6/6/2014) - Good Morning— Happy Friday. I hope everyone had a great week, lets finish it up on a high note and get involved in the weekend. We have a few positions on and there are a few that I want to bring to your attention. So lets get crackin’… In the Indices and Financials: With yesterday’s... Read More.
  • Market Spotlight: Crude Oil (4/24/2014) - Perhaps the most controversial debate of our age is the amount of oil we have left to pump from the earth. Some speculate as many as hundreds of years, while others say we may experience an output shortage as early as 2015.
  • Turner’s Take – Corn, Soybean & Crude Oil (2/20/2014) - March corn is now trading above $4.50 and has stopped us out of our short position from $4.25. While I remain bearish on corn prices for 2013/14 and 2014/15, you can’t deny these low US corn prices have spurned demand from exports, ethanol and animal feed.
  • Technically Speaking: Markets You Should Be Watching Right Now! (5/9/2012) - This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook. July / December CRUDE OIL spread: I am looking to get LONG the Crude Oil market heading into the summer with all the summertime support that comes along with it. As volatile as CRUDE has been of late, I will go with... Read More.
  • Opportunities for Breakout Moves in Crude Oil Futures (4/18/2012) - I probably sound like a broken record for writing this but I like to trade crude oil futures when the weekly EIA crude oil inventory report is released. It has the potential to cause sudden market move but is often less likely to cause the crazy overshoot reactions of a once a month report.
  • Crude Oil Futures FAQ (9/2/2011) - Futures contracts, including trading in crude oil futures, are financial instruments that carry with them legally binding obligations. Buyer and seller have the obligation to take or make delivery of an underlying instrument at a specified settlement date in the future. Oil futures are part of the derivatives family of financial products as their value... Read More.