Economic concept

Hedging

Taking a position designed to offset an existing price risk.

What are futures, and why do they matter even if you don't invest?

A futures contract standardises a price for a later transaction. Producers and users hedge uncertain prices, while trading helps form benchmarks that influence physical contracts, planning, inventories and eventually the prices households face.

See it at work

Why is oil priced in dollars?

Oil is usually quoted and traded in dollars because the dollar is already the common currency of global trade and finance. Dollar funding, benchmarks, derivatives and liquid assets reinforce that choice. It is a durable convention, not a universal legal rule.