Finance Tools
Oil Hedging Ratio Calculator
Estimate how many oil futures contracts you need to hedge a physical exposure, based on volume (barrels) and contract size.
A simple hedge sizing tool: choose how much of your physical oil exposure you want to hedge, then convert that volume into a futures contract count using contract size.
If you have gallons, convert to barrels first (or use your own conversion).
Example: 1,000 bbl/contract.
100% hedges the full exposure (in volume terms).
Rounding changes your realized coverage because contracts are discrete.
Target hedged volume: 20,000 bbl (80% of 25,000 bbl)
Raw contracts: 20.000
Estimated hedge contracts: 20
Implied hedged volume: 20,000 bbl
Implied coverage: 80.0%
This is volume-based sizing only. Real hedge effectiveness depends on basis risk, contract specs, and timing.
How to use this oil hedging ratio calculator
- Enter your physical exposure in barrels (or convert from gallons first).
- Enter barrels per futures contract.
- Choose hedge coverage percent (e.g., 50%, 100%).
- Review estimated hedge contracts and the hedged volume.
Example
If you need to hedge 25,000 barrels, contract size is 1,000 bbl, and you hedge 80%:
- Hedged volume = 25,000 × 80% = 20,000 bbl
- Contracts ≈ 20,000 ÷ 1,000 = 20 contracts
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- Oil Price Sensitivity Calculator
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