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AN INSIGHT
TO DAY TRADING

TOP 3 ENERGY FUTURES


The accessibility of energy has changed the course of humankind throughout the most recent couple of hundreds of years and the energy framework has changed drastically since the industrial revolution. Demand for energy is developing across numerous nations on the planet, as individual’s wealth increases while the population is growing.


According to a report published by REN21, petroleum products represented around 80% of worldwide energy consumption in 2019, a similar portion of the energy mix as 10 years ago. While worldwide environmentally friendly power generation expanded by around 5% every year in the range of 2009 and 2019, capacity for fossil fuels increased by 1.7%. Therewith, the portion of petroleum products in the absolute worldwide energy utilisation structure stayed consistent. Coal, oil and gas represented 80.3% of the usage in 2009 and 80.2% in 2019. This was regardless of an expansion of the worldwide energy utilisation met with renewables, from 8.7% to 11.2%, across that ten-year time frame.


Commodity futures are traded at the CME Group in the United States where WTI Crude Oil, natural gas and gasoline are the most popular energy futures with regards to traded volume.


CRUDE OIL

Crude oil is the world's primary energy source and finite resource that can be refined to create everyday products such as gasoline, diesel fuel, and petrochemicals for plastics.


Before the industrial revolution, agricultural staples like corn and wheat dominated the commodity markets. That has changed during the last century and making crude oil the most actively traded commodity worldwide with an average global consumption of around 35,500,000,000 barrels per year according to the EIA whereof an average of about 18.19 million barrels of petroleum per day, or a total of about 6.66 billion barrels of petroleum accounted to the United States, in 2020.


Further, the United States are the global leader in oil production business where Texas produces the most oil out of all states with over 1.7 billion barrels each year, maintaining an oil reserve of more than 18 billion barrels. That is followed by Saudi Arabia and Russia with a distance.


Today, oil is tightly interconnected with most parts of the worldwide economy as a consumer good as well as raw material for production and transportation. West Texas Intermediate (WTI) crude oil futures are the world’s most liquid oil contracts and are traded at the NYMEX part of the CME Group in the United States.

CRUDE OIL FUTURES - CONTRACT SPECIFICATIONS

Contract Unit

1,000 barrels

Price Quotation

U.S. dollars and cents per barrel

Trading Hours

Sunday - Friday 6:00 p.m. - 5:00 p.m.

Minimum Price Fluctuation

0.01 per barrel = $10.00

Product Code

CL

Listed Contracts

Monthly contracts listed for the current year and the next 10 calendar years.

Settlement Method

Deliverable

Last Trading Day

Trading terminates 3 business day prior to the 25th calendar day of the month prior to the contract month.

Settlement Procedures

Exchange

NYMEX


NATURAL GAS

According to the Geological Society, natural gas was known to ancient civilizations already, however, the first commercialization of the commodity came with the industrial revolution. In 1785, the Great Britain started using natural gas isolated from coal to light their houses and streets. During the 20th century, the development of pipelines enabled more efficient transportation ways and new markets for natural gas. The improved infrastructure made it available for everyone while becoming a commodity used in home heating, cooking and appliances such as water heaters, oven ranges, manufacturing plants and boilers.


Today, the United States is the largest global producer of natural gas followed by Russia and Iran. The commodity plays a key role in generating electricity and illustrates a source of fuel for the industry and private homes. The U.S. Energy Information Administration published that more than 50% of the energy used by residential and commercial customers in the United States is allocated to natural gas while more than 40% of the energy is consumed by industry representing a crucial energy commodity for the country.


Natural gas futures are the second most traded energy future at the NYMEX respective CME Group in the United States.

NATURAL GAS FUTURES - CONTRACT SPECIFICATIONS

Contract Unit

10,000 MMBtu

Price Quotation

U.S. dollars and cents per MMBtu

Trading Hours

Sunday - Friday 6:00 p.m. - 5:00 p.m. (5:00 p.m. - 4:00 p.m. /CT)

Minimum Price Fluctuation

Intercommodity spreads: 0.00025 per MMBtu = $2.50

Product Code

NG

Listed Contracts

Monthly contracts listed for the current year and the next 12 calendar years.

Settlement Method

Deliverable

Last Trading Day

Trading terminates on the 3rd last business day of the month prior to the contract month.

Settlement Procedures

Exchange

NYMEX


GASOLINE

Referring to the U.S. Energy Information Administration, gasoline is a fuel produced from crude oil and other petroleum fluids. After the invention of the automobile in 1892, gasoline turned into the fundamental wellspring of fuel for vehicles. This makes gasoline one of the most significant and notable products on the planet. Today, gasoline is for the most part utilised as a motor fuel in vehicles.


Gasoline production takes place in oil refineries. These modern facilities separate crude oil, which comprises of various hydrocarbons, into more modest part hydrocarbons until they can extract the gasoline. In 2020, Americans utilised around 123 billion gallons of motor gasoline, respectively, around 337 million gallons per day. Gasoline is one of the most significant fuels consumed in the United States and is the primary resource that oil refineries in the that country produce. The total consumption gasoline accounts for around 59% of the entire energy used in the transportation sector whereof light-duty vehicles such as cars, small trucks and sport utility vehicles represent 92% of all gasoline consumption in the United States.


The largest producer of gasoline from a global perspective are the United States by far followed by China and Japan. On the other side, the United States are also by far the largest consumer followed by Japan and Canada according to The Global Economy.


Gasoline futures are the third most traded energy commodity at the NYMEX respectively the CME Group in the United States.

PETROLEUM FUTURES - CONTRACT SPECIFICATIONS

Contract Unit

42,000 gallons

Price Quotation

U.S. dollars and cents per gallon

Trading Hours

​Sunday - Friday 5:00 p.m. - 4:00 p.m. CT

Minimum Price Fluctuation

0.0001 per gallon = $4.20

Product Code

​RB

Listed Contracts

Monthly contracts listed for the current year and the next 3 calendar years.

Settlement Method

Deliverable

Last Trading Day

Last business day of the month prior to the contract month.

Settlement Procedures

Exchange

NYMEX