The trade data shows that volumes of US crude oil light futures, which are the most commonly traded deals during the year, will reach a record of nearly 150 million transactions. This is more than double compared to 71 million Brent futures transaction, which further increases the gap between traded contracts, mainly because crude oil exports to the United States grew by almost 70% over the past five years.
There is also a tendency for open market interest, with the number of traded contracts on the WTI beginning to outpacing the one on the Brent breed in September.
The oil producers use derivatives markets to secure their profits while buyers seek to protect themselves from rising prices, with liquidity being further exacerbated by multiple complex trading strategies and speculation on the part of investors.
The crude oil production in the US is fast approaching 10 million barrels per day, with only Saudi Arabia and Russia being bigger producers.
Asian big consumers like China to Japan use the futures markets only a little, resulting in much lower market activity of derivatives during the Asian trading hours. But things can change. In Iraq, OPEC’s largest producer, the state-owned oil company SOMO, may begin to hedge some of its output as a way to protect state revenues against the risk of falling oil prices.