Definition
Crude Oil Futures
Crude oil futures are contracts to buy or sell oil at a set price for future delivery, with MCX crude tracking the global WTI benchmark in rupee terms.
MCX crude oil futures follow the US WTI benchmark, letting Indian traders and businesses hedge or speculate on oil prices in rupees. Each standard lot is 100 barrels, with a mini contract of 10 barrels for smaller players.
Crude is India's largest import, so oil prices directly affect the current account deficit, inflation and the rupee. Refiners, airlines and logistics firms use crude futures to manage fuel-cost risk, while moves in global oil ripple through Indian markets and fuel prices.
Related terms
- Current Account Deficit (CAD)The current account deficit arises when a country pays more abroad for goods, services and income than it earns, meaning it is a net borrower from the rest of the world.
- Brent vs WTIBrent and WTI are the two main global crude oil benchmarks: Brent from the North Sea prices most international oil, while WTI from the US is lighter and a key American reference.
- OPECOPEC is the Organization of the Petroleum Exporting Countries, a cartel of major oil producers that coordinates output to influence global crude prices.
- Contango / BackwardationContango is when futures prices are higher than spot (upward-sloping curve), and backwardation when they are lower (downward-sloping), reflecting storage costs versus supply tightness.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.