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A comment on U.S. crude oil price tops $80 a barrel, the highest since 2014. Parent comment

Re:U.S. crude oil price tops $80 a barrel, the highest since... by hammock on Thursday October 14, 2021 @12:17PM (#28866296)
>The last sentence is not true.

Is that so? In theory, derivatives like futures can increase the efficiency of market clearing. Nevertheless, it is apparent that the price of oil is many times more volatile than the price of downstream finished goods using oil.

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Re:U.S. crude oil price tops $80 a barrel, the highest since... by mpmpmpmp on Thursday October 14, 2021 @12:48PM (#28866678)
Yes and it's precisely because futures and forward contracts are being used that is possible. If it wasn't then market uncertainty and fluctuations in the economy would be more instantly reflected in prices of the end user products consuming those commodities. With hedging now you can focus on margin and operations which is the whole point of your business, not predicting the global economy.
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