Crude Oil and Energy Futures

Course 11 of 60 in the futures hub. This one covers crude oil (CL) and natural gas (NG) futures: what a tick costs, the weekly reports that move them, and why they need their own sizing.

Energy runs on inventories and the calendar

Crude oil and natural gas futures aren't bets on whether oil goes up. They're priced off supply, storage and the shape of the futures curve, and they get repriced every week when the government publishes inventory numbers. Traders who come from stock index futures often get caught holding crude into that report with a stop sized for a quiet index day.

Energy gaps are part of the product, so plan for them rather than treating them as glitches. Currency traders deal with a different set of scheduled shocks, covered in the forex course.

1. What a crude contract is worth

One CL contract is 1,000 barrels of crude. The price moves in steps of one cent per barrel, so each tick is $10 and a $1 move is $1,000 per contract. At an illustration price of $80 a barrel, the same figure on the diagram, one contract controls $80,000 of oil. That's the number to keep in mind, more than the margin.

Margin is what the broker holds as a deposit. Spare margin isn't an invitation to add contracts. In that illustration a 3% move is $2.40 a barrel, or $2,400 per contract, which can be a lot of a small account. Run your own case through the margin calculator.

2. Natural gas moves differently

Natural gas (NG) is 10,000 MMBtu per contract, and its tick of a tenth of a cent is also worth $10. The same tick value hides very different behavior. Gas can swing hard on weather forecasts and storage numbers, and a range that looks normal for crude can be quiet for gas. Both contracts have exchange price-limit rules for extreme days. First, crude in dollars:

CL: 1,000 barrels × $0.01 = $10 a tick. A 30-cent stop is 30 ticks = $300 per contract. With $150 to risk, the answer is zero contracts.

The arithmetic doesn't care how good the setup looks. If the stop the chart needs costs more than you can lose, the trade is a pass. Measure the normal daily range for each market on its own, size each separately, and never carry a crude stop over to gas because the charts look alike. The risk calculator does the sizing.

3. The curve as well as the price

Crude lists a contract for every calendar month, and the prices across those months form a curve. When near months trade above later ones, the market is paying up for oil now; when later months are higher, that's usually a sign supply is ample. The shape changes with inventories, and it affects what you pay to roll a position.

If you hold crude for more than a few weeks, you'll roll every month, and the curve decides whether each roll costs or pays. Crude is also physically delivered, so the expiring month stops trading before delivery begins, and you want to be out well before then. The free calculators help put roll costs in dollars.

4. The weekly reports

The U.S. Energy Information Administration publishes its Weekly Petroleum Status Report on Wednesdays at 10:30 a.m. Eastern, and its natural gas storage report on Thursdays at 10:30 a.m. Eastern. Holiday weeks can push them back; the oil report for the week ending October 9, 2026 comes out Thursday, October 15 at noon Eastern because of Columbus Day.

Know the times and decide your policy for each: flat before it, smaller through it, or held with a stop wide enough to survive the reaction at a size you can afford. Check EIA's schedule page for holiday changes.

5. Thin overnight trading

Energy futures trade nearly around the clock, but the overnight hours are thinner than the U.S. daytime session. News from overseas producers or pipelines can hit while volume is light, and price can jump past a stop that looked safe at the close of the day session.

If you can't say how much you're willing to lose on an overnight gap, flatten before the evening session. Index futures behave differently at night, and the E-mini S&P and Nasdaq lesson covers those.

6. Where energy traders get hurt

Holding crude into the Wednesday report with a stop sized for a calm day. Treating gas like crude. Adding contracts because margin allows it. Forgetting the roll or the delivery calendar and finding the position in the expiring month at the worst moment.

Exchange margins and price-limit levels change with conditions, so check the current CME figures before you trade. Next up is gold and silver futures, which answer to different drivers.

Sizing crude and gas side by side

Say you can risk $300 on a trade. In crude, a 30-cent stop is $300, so one contract fits exactly. In gas, a 3-cent stop is also $300, because each tenth of a cent is $10. Whether 3 cents is a reasonable stop for gas on a given day is the real question, and only the recent daily range can answer it.

Check both markets' typical daily moves before deciding. If a normal gas day moves several times your stop, the stop is just a donation. In that case trade smaller, wait for a quieter week, or leave gas alone.

Before you trade energy

• CL and NG both have $10 ticks, but they don't move alike.
• Mark Wednesday's oil report and Thursday's gas report every week.
• Know your roll and delivery dates before you hold more than a few days.
• Decide what an overnight gap may cost, or be flat overnight.

Energy rewards people who respect the calendar and punishes people who trade it like an index. Educational only. Not a recommendation to buy, sell, or hold any contract or pair.