Crude Oil Futures Explained: WTI, Brent, Cushing Delivery, and the Futures Curve

A crude oil futures contract is an agreement to buy or sell 1,000 barrels of a specific grade of crude oil for a specific delivery month at a price agreed today. The two global benchmarks are WTI, traded on CME Group’s NYMEX and delivered at Cushing, Oklahoma, and Brent, traded on ICE Futures Europe and tied to North Sea cargoes.

In short: NYMEX WTI Light Sweet Crude Oil futures (CL) cover 1,000 barrels, tick in $0.01 a barrel worth $10 per contract, and are physically delivered at Cushing. ICE Brent Crude futures (B) also cover 1,000 barrels with a $0.01 tick, but settle by exchange of futures for physical with an option to cash settle against the ICE Brent Index. A $1 move in either is $1,000 per contract. CME also lists smaller versions: E-mini Crude Oil (QM, 500 barrels) and Micro WTI (MCL, 100 barrels, cash settled).

The two benchmarks side by side

Specifications from the NYMEX rulebook (Chapter 200) and CME fact sheets, and from ICE’s Brent Crude Futures product page. Trading hours are as of November 2026.

Feature	WTI (NYMEX CL)	Brent (ICE B)
Contract size	1,000 barrels	1,000 barrels
Price quote	US dollars and cents per barrel	US dollars and cents per barrel
Tick	$0.01 = $10.00	$0.01 = $10.00
Listing	Monthly	Monthly, many years forward
Settlement	Physical delivery at Cushing, Oklahoma	EFP, with option to cash settle against the ICE Brent Index
Last trading day	Third business day before the 25th calendar day of the month before delivery (with holiday adjustments)	Last business day of the second month before the contract month (for example, the March contract stops at the end of January)
Hours	Sunday to Friday, 5:00 p.m. to 4:00 p.m. CT, with a 60-minute break each day	Nearly 24 hours on ICE’s electronic platform
Daily settlement	CME’s settlement window	Weighted average of trades in a two-minute window starting 19:28 London time

Why two benchmarks?

WTI (West Texas Intermediate) is a light, sweet US crude. Its futures price reflects oil available at Cushing, a pipeline and storage hub in the middle of the US. Brent is a basket of North Sea crude grades loaded onto tankers, so it reflects seaborne oil available to the world market. Since mid-2023, cargoes of US WTI Midland crude have been part of the Dated Brent assessment that underlies the physical North Sea market, which ties the two benchmarks together more closely than in the past.

The spread between them moves with pipeline capacity, shipping costs, US export volumes and regional supply disruptions.

How WTI delivery works

The CL contract is physically settled. If you are short at expiry, you must deliver 1,000 barrels per contract of WTI-type light sweet crude meeting the exchange’s quality specifications. If you are long, you must accept delivery. Delivery is made at Cushing, Oklahoma, at pipeline or storage facilities connected to the Cushing hub, spread across the delivery month.

That is why the vast majority of positions are closed or rolled before the last trading day. A trader who holds a long contract into delivery needs somewhere to put 42,000 US gallons of crude, which means having access to storage or pipeline capacity at Cushing. For more on delivery versus cash settlement, see physical vs cash settlement.

Brent works differently. ICE’s contract settles by exchange of futures for physical (EFP) or, for positions still open, in cash against the ICE Brent Index, an average of prices in the North Sea physical market for the relevant month, published the day after expiry. No one is forced to take a tanker cargo by holding a futures contract to the end.

Worked example: tick arithmetic

Prices below are illustrative, not forecasts.

One CL contract. You buy one December WTI contract at $72.40. By the end of the day it settles at $71.15.

Move: $72.40 minus $71.15 = $1.25 per barrel against you.
Ticks: $1.25 / $0.01 = 125 ticks.
Loss: 125 x $10 = $1,250. (Check: $1.25 x 1,000 barrels = $1,250.)

The loss is taken from your account at that day’s settlement through daily mark-to-market. The next day starts fresh from $71.15. See how futures margin works.

One Brent contract. You sell one Brent contract at $76.00 and buy it back at $75.62.

Move: $0.38 in your favour = 38 ticks.
Gain: 38 x $10 = $380.

Smaller contracts. The same $1.25 move on one E-mini Crude Oil (QM, 500 barrels, quoted in $0.025 ticks worth $12.50) is $625. On one Micro WTI (MCL, 100 barrels, $0.01 tick worth $1.00) it is 125 x $1 = $125. MCL is financially settled against the CL settlement price and expires the business day before the matching CL contract, so there is no physical delivery.

A Brent-WTI spread. Some traders and hedgers care about the gap between the two benchmarks rather than the level of either. Suppose a trader buys one Brent contract at $76.00 and sells one WTI contract for the same month at $72.40, a spread of $3.60. Later Brent is at $75.10 and WTI at $71.20, so the spread has widened to $3.90.

Brent leg: $0.90 loss = 90 ticks x $10 = minus $900.
WTI leg: $1.20 gain = 120 ticks x $10 = plus $1,200.
Net: plus $300, which is the $0.30 widening of the spread x 1,000 barrels.

Both oil prices fell, but the position made money because it was a bet on the spread. The reverse is just as possible. Note that the legs are on different exchanges, so the margin offsets that apply to spreads within one exchange may not apply here. Spreads in general are covered in futures spread trading.

The futures curve and what drives it

Crude oil futures are listed for many months ahead, and the line connecting their prices is the futures curve. Its shape tells you how the market is pricing oil for each future month.

Contango: later months are priced above nearer months. This usually happens when supply is plentiful and inventories are high. Someone who buys oil today and stores it needs the later price to cover storage and financing costs.
Backwardation: nearer months are priced above later months. This usually happens when supply is tight, and buyers will pay up for barrels now rather than later.

Both shapes, and the roll yield they create for anyone holding futures over time, are explained in contango and backwardation.

What moves the curve:

Inventories. The US Energy Information Administration publishes the Weekly Petroleum Status Report, including Cushing stocks, usually on Wednesdays. Large surprises move prompt contracts.
Production decisions. OPEC+ output targets and US shale activity affect supply expectations.
Demand. Economic growth, refinery runs, seasonal driving and travel demand.
Storage capacity. When storage fills, the front of the curve can fall far below later months.
Geopolitics and shipping. Supply disruptions or sanctions tend to lift nearby Brent more than distant months.
The dollar and interest rates. Oil is priced in dollars, and higher rates raise the cost of holding inventory.

The April 2020 lesson

On April 20, 2020, the expiring May 2020 WTI contract settled at minus $37.63 a barrel, the first negative settlement in the contract’s history. Demand had collapsed in the pandemic, storage at Cushing was filling, and holders of long May contracts faced either taking delivery with nowhere to put the oil or selling at any price before the last trading day. The CFTC’s staff report on the episode is the authoritative account, and the full story is in negative oil prices in April 2020.

The lesson for anyone using CL is simple: a physically delivered contract near expiry can behave very differently from the same contract a month earlier, and price can fall below zero.

Who uses oil futures

Producers sell futures to lock in prices for future output.
Refiners and airlines buy crude or product futures to manage input costs.
Commodity funds and ETFs hold futures to provide oil exposure, rolling them every month.
Speculators and spread traders take views on price or on the shape of the curve.

What can go wrong

Volatility. Oil can move several dollars a barrel in a day on a surprise production decision or geopolitical event. A $5 move is $5,000 per CL contract.
Expiry squeezes. Close to the last trading day, liquidity in the expiring contract thins and prices can dislocate, as April 2020 showed.
Delivery obligations. Retail brokers usually force-close CL positions well before expiry because customers cannot take or make delivery. If they do not, the obligation is real.
Roll costs. Anyone holding oil exposure through futures over months pays or earns the difference between contract months each roll.
Margin increases. Exchanges raise margins when volatility spikes. Requirements as of November 2026 are posted on the CME Group and ICE websites; check them directly.
Gaps between benchmarks. A hedge in WTI for a cargo priced off Brent, or vice versa, carries basis risk.

The takeaway

WTI and Brent futures each cover 1,000 barrels, and each cent per barrel is $10 per contract. WTI is physically delivered at Cushing and stops trading around the 20th of the month before delivery; Brent stops at the end of the second month before delivery and settles through EFP or against the ICE Brent Index. The curve’s shape reflects inventories and storage, and near expiry a physically settled contract can do things that surprise people, including going negative.