How to Track Oil Futures

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Oil futures are traded daily.
Oil futures are traded daily.

Businesses and speculators around the world trade a variety of oil futures. The most common type of oil futures are contracts for West Texas Intermediate Crude, often abbreviated as WTIC, or simply "crude." Futures contracts are agreements between buyers and sellers on a future price of a commodity sold at a price determined today. WTIC is the benchmark for oil prices across the financial markets. Businesses use futures to protect themselves from price changes, and speculators try to profit from price swings. By tracking oil futures, it is possible to identify coming economic trends due to the impact of price changes.

Things You'll Need

  • Financial information website
  • Charting Service
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Instructions

  1. Tracking Oil Futures

    • 1

      Find the crude oil futures chain. Yahoo! Finance offers free effective tools for viewing crude futures (See Resources). On the main page of Yahoo! Finance, place your cursor over the "Investing" tab and select "Market Stats." Click the "Futures" link under the "Commodities" section on the left side of the page. Energy commodities are the default page, and crude oil is the first energy commodity listed. The ticker symbol for crude futures uses an alphabetical system to identify the month. CLF10 are crude futures for delivery in January 2010. "F" is the designation for January and 10 refers to the year 2010. Next would be "G" for February, continuing consecutively until "Z" for December, after which the designation returns to "F" for January of the next year.

      To view the futures chain, click the "futures chain" link under the "Related Info" section. This page displays all crude futures currently being traded. Prices are updated in real time.

    • 2

      Identify the "front month." The most commonly tracked futures are referred to as "front month," which are the contracts that expire closest to the current date. Tracking this price daily can give you insights into the direction crude oil is trending.

    • 3

      Chart the crude futures. Stockcharts.com offers free effective charting tools (see Resources). Different charting services use different ticker symbols to identify oil futures. On Stockcharts.com, the ticker is "$WTIC." $WTIC is charted as a continuous contract. Continuous contracts always use the price of the front month contract. The chart displayed will show you historical price behavior of crude oil. The price represented is delayed by 20 minutes and can be tracked daily.

Tips & Warnings

  • Applying technical analysis to crude oil charts can help you identify future trends. Technical analysis uses historical price behavior to determine future price behavior. Oil trends are usually very strong and require material news which alters the balance of supply and demand in order to change the direction of price action.

  • If you are considering trading oil futures, it is important to recognize that you are competing against professional traders with powerful tools, large amounts of capital, and robust information sources. Tracking oil futures should also be used in conjunction with other tools in order to make a truly informed estimation of future economic activity.

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References

Resources

  • Photo Credit oil well image by michael langley from Fotolia.com

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