Oil Future (Noun)
Meaning
Petroleum bought or sold at an agreed price for delivery at a specified future date.
Classification
Nouns denoting man-made objects.
Examples
- Hedging against potential losses is a common practice in the oil future market, where companies can buy or sell contracts for delivery of oil at a predetermined price.
- As an investment, an oil future represents the obligation to take or make delivery of oil on the contract date, regardless of market prices at the time.
- Trading oil futures on the commodities exchange provides speculators with a way to profit from price fluctuations.
- To mitigate risks associated with price volatility, many airlines enter into contracts for oil futures to lock in prices for jet fuel.
- An oil future contract typically includes specifications regarding quantity, quality, and delivery point to facilitate large-scale commercial transactions.