Description
The type most frequently used in the oil and Gas industry are psuedo-sales transactions (rather than physical sales of oil, etc). The simplest is the forward sale of oil that is not intended to be delivered, but 'matched' With a suitable purchase at some intervening time. Derivatives include ?Swaps? and 'Options'. Their most common use is to control price risk fluctuations through the markets rather than in conflict with them.
Source :
Alpha Thames Ltd 2004