Crude oil Spot priceA crude oil spot price refers to the ‘cash’ market for oil. This price is quoted per barrel for a prespecified type of benchmark crude. Due to the toxicity and safety requirements of oil storage, trading in the spot market is limited to parties that are able to store and transport crude oil.
Crude oil futures contract, May Expiry
Refers to a derivative agreement (an exchange traded futures contract) whereby a buyer and seller agree a price at inception for the purchase and delivery of 100 barrels of a prespecified type of physical crude oil in the month of May. An example (and the most liquid crude oil futures contract) would be the WTI crude oil future that is traded on NYMEX and refers to the delivery of 1000 barrels of West Texas Intermediate Light Sweet Crude Oil to a depo in Cushing, Oklahoma.
Trading in the futures terminates at the close of business on the third business day prior to the 25th calendar day of the month preceding the delivery month. If not closed out prior to this date, the seller will be required to physically deliver the crude oil.
Crude oil futures contract, June Expiry
Similar in terms to all the specifications listed above except for expiry occurring in the following month, i.e. June.
Crude oil futures option price
A futures option is an option giving the purchaser the right to enter into a futures contract in crude oil. In return for this right the purchased will be required to pay a premium. This premium is the price of the option contract and is related to the type of option (call or put), expiry date and strike price.
CME quotation page of option prices:
