Energy Futures Slope Downward

By Commodity HQ  MAR 24, 2014 11:10 AM

Futures contracts for cotton, crude, and gasoline are decreasing in price as they move toward maturity.


Backwardation is the process by which futures contracts decrease in price as they move further out in maturity. This can often be due to the expectation of future prices or trends in a certain hard asset, but it can also occur from supply boosts, among other things. Though it is not a phenomenon that should worry investors, keeping an eye on the futures curve can help you make more informed investment decisions.

Below, we outline four of the most popular commodities that are currently exhibiting backwardation:
Editor's note: This article by Jared Cummans was originally published on Commodity HQ.

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