Oil futures involve an investor buying a contract that means he will sell a stake in oil commodities back by a certain date. If the price of oil rises then the contract will be a profit for the holder. If the price drops, then the holder will still have to make good on the contract at a personal loss.
Oil futures can play different sides of the oil industry. There are futures for heating oil, crude oil supply, airline fuel, and more.« Back to Glossary Index