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This can make oil futures particularly volatile, as they are contracts to be settled at a future date.
Near the beginning of the coronavirus pandemic, in April 2020, oil futures absolutely plummeted.
In addition to the collapse in worldwide demand for oil in general, speculators holding futures had a problem.
If you actually hold anoil futures contractuntil expiration, you must take physical delivery of actual barrels of oil.
This dramatically drove up the price of oil storage, makingoil futures contractseven less desirable.
However, you could not have held oil futures you bought in April 2020 until February 2025.
If you received $40.32 per barrel to pick up that contract on Apr.
This makes oil futures an appropriate investment only for the most aggressive traders and speculators.
Generally speaking, oil futures should be left to professional traders and speculators.
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