Crude oil is the world's most actively traded commodity, with prices quoted per barrel (42 US gallons). Oil trading profit is calculated by multiplying the price difference between entry and exit by the total number of barrels traded. A standard WTI crude oil futures contract on the CME represents 1,000 barrels, so each $1 move in the per-barrel price translates to a $1,000 profit or loss per contract.

The formula is: P&L = (Exit Price - Entry Price) x Total Barrels. For example, if you buy 1 contract (1,000 barrels) at $72.50 and sell at $78.25, your per-barrel gain is $5.75 and your total profit is $5,750. The ROI against the notional entry value of $72,500 is 7.93%.

Oil prices are influenced by supply and demand dynamics, OPEC production decisions, geopolitical events, economic data, and seasonal patterns. Because crude oil futures are highly leveraged, the margin required to control a contract is a small fraction of the notional value. This leverage amplifies both gains and losses, making risk management through stop losses and position sizing essential for oil traders.