Contango is a situation where the futures price of a commodity is higher than the spot price. It usually occurs when an asset price is expected to rise over time. This results in an upward sloping forward curve. In contango, investors are willing to pay more for a commodity at some point in the future. Sometimes referred to as forwardation, contango is the opposite of backwardation. In the futures markets, the forward curve can be in either contango or backwardation.

  • Means we have an oversupplied market
  • Oil on the market is being put into storage