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Your Oil Refinery Will Need to Buy 250,000 Barrels of Crude

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Essay

Your oil refinery will need to buy 250,000 barrels of crude oil in one week and it is worried about crude oil prices. Suppose you go long 250 crude oil futures contracts, each for 1000 barrels of crude oil, at the current futures price of $68 per barrel. Suppose futures prices change each day over the next week as follows: Your oil refinery will need to buy 250,000 barrels of crude oil in one week and it is worried about crude oil prices. Suppose you go long 250 crude oil futures contracts, each for 1000 barrels of crude oil, at the current futures price of $68 per barrel. Suppose futures prices change each day over the next week as follows:   What is the daily and cumulative marked to market profit or loss (in dollars)that you will have on each of the next five days? What is the daily and cumulative marked to market profit or loss (in dollars)that you will have on each of the next five days?

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