An oil future is a standardized contract to buy or sell a specific quantity and grade of crude oil at a predetermined price for delivery on a future date. Major oil futures include West Texas Intermediate (WTI) and Brent crude, which serve as global pricing benchmarks. These contracts enable hedging, speculation, and price discovery in global energy markets.

Oil futures provide essential risk management tools for producers, refiners, and consumers while enabling efficient price discovery and market liquidity. Contract specifications include delivery location, quality standards, and settlement procedures. Most oil futures are financially settled rather than physically delivered, making them accessible to financial participants.

Real-world example: A refiner sells December WTI crude futures at $78 per barrel to hedge against falling oil prices, locking in revenue for future crude oil purchases regardless of market price movements at delivery time.