Serving the Quantitative Finance Community

 
CarterMcCoy
Topic Author
Posts: 44
Joined: May 12th, 2020, 5:03 pm

Oil Futures Contracts Names

March 26th, 2021, 11:02 pm

Hi there everyone,

Just for my own understanding - why is an oil futures contract called a 'bar'?  Is that short for BARrel or does it have to do with the oil price of gold (bar then referring to a bar of gold for a barrel of oil)?

Much appreciated!
CM
 
User avatar
bearish
Posts: 6376
Joined: February 3rd, 2011, 2:19 pm

Re: Oil Futures Contracts Names

March 28th, 2021, 6:07 pm

This feels like a very local (in time and/or space) piece of slang. I’m not a commodities guy, but have been interested in futures markets and such things for decades, including teaching it to MBAs, and I can’t say I’ve ever encountered this usage. A brief search also fails to bring up anything. Perhaps @tagoma can help out?
 
User avatar
tagoma
Posts: 18540
Joined: February 21st, 2010, 12:58 pm

Re: Oil Futures Contracts Names

March 29th, 2021, 3:04 pm

Unfortunately, I have never heard of that (my background: experience at a oil major and commodities HF).
@CarterMcCoy you seem to make the link between the value petroleum and gold, so maybe it is more global macro portfolio stuff? Maybe you can provide details on your context? The only mentions of gold I have ever read/heard I think (in relation with the job at least) are in inspectors' reports after they analysed the composition of samples taken on tankers/barges and in the exploration division when the guys analyse crude assays.
Or, as @bearish suggests, maybe it simply is very "local" e.g. maybe it is traders' parlance at the company where you heard that?
 
CarterMcCoy
Topic Author
Posts: 44
Joined: May 12th, 2020, 5:03 pm

Re: Oil Futures Contracts Names

March 29th, 2021, 8:58 pm

@tagoma - Sadly the comment didn't come from a trader at my firm but rather a Rando Calrissian I met while drinking pints on Friday.  He was talking about his financial 'acumen' and at least managed to note the correct codes for oil futures settling in Dec'20 (CLZ20).  Instead of just saying "oil future" he kept calling it a 'bar.'  Which might either be him shortening 'barrels' or just speaking out his ass.   My own interest and OCD took over after that.

I've attached the file used to 'support' (if you want to call it that) my hypothesis that he might be referring to the value of oil vs. gold instead of USD.
Attachments
SSRN-id388283.pdf
(137.09 KiB) Downloaded 13 times