Comprehensive Project proposal

Broader area Finance Proposed topic- Role of crude oil in commodity future market. Name- Barun kumar Registration No.- FT-FS-10-815

Role of crude oil in commodity future market. Commodity derivatives play a pivotal role in the price risk management process especially in any agricultural surplus country. As unique hedging instruments derivatives such as forwards, futures, swaps, options and exotic derivative products are extensively used in the global market. However, Indian market is limited to commodity futures only. Crude oil is a yellowish black mineral oil that is extracted from under the surface of the earth. This oil is consists of a number of hydrocarbon compounds as it is formed from the million of years old animal and plant remnants. This mixture of hydrocarbons remains in the liquid form under the normal atmospheric temperature and when distilled, a number of byproducts can also be extracted. Crude oil is also an important ingredient of some medicines due to the curing properties it has. Crude oil can be of different types depending upon its origin and its relative weight. Brent crude oil is one of the most important types of crude oil and it is also considered as a benchmark in the context of the price fixation of the other types. Brent crude oil is a lighter type crude oil possessing API (American Petroleum Institute) gravity of 38 to 39 units and having medium levels of sulfur.

Problem statement: Overview of commodity market in India. Role of crude oil in commodity market Impact of crude oil in commodity market

Sources of data: My project will be mainly based on secondary data sources. It include different websites like www.mcxindia.com www.google.com news papers.

Expected finding from the project: With the help of this project I believe I can find the role of crude oil in the commodity market.