What are Gas Futures?
Many of the world’s motorists may well remember the first signs of price volatility in the market for gasoline. Prices at gas stations skyrocketed in 1973 after the Yom Kippur War, and once again in 1979 when further supply disruptions occurred. There were, at the time, controls on the allocation and the price of gasoline, but these controls were removed in 1981. Soon after this event, the first gasoline futures were introduced on the New York Mercantile Exchange (NYMEX). Futures contracts are one of the ways that are used to manage price risk in the financial markets. The purpose of futures contracts is to help avoid surprises because of price volatility when it comes to commonly used commodities. All commodity futures are contracts to deliver a certain amount of a certain product at a particular date in the future. Gas futures are contracts for the delivery of gasoline in a given month in the future, at a certain price. Gas futures are traded in terms of the month in which the delive
