Backwardation

RECENT NEWS
Commodity Online  May 7  Comment 
All the usual copper demand indicators for China have been turning positive. High frequency end-demand indicators have started to pick up, the SHFE/LME import price arb has opened, SHFE stocks and bonded stocks have been falling, physical import...
Commodity Online  Mar 30  Comment 
With total US crude oil stocks at 382.7 million bbls, backwardation in WTI may just be temporary. Meanwhile, there are many reasons to believe that the Brent market is likely to stay in backwardation for a long time going forward.
Resource Investor  Feb 28  Comment 
The price of silver futures contracts have been regularly flirting with a state of backwardation ever since the 2008 financial crisis, which is a sign of a growing physical silver shortage.
Reuters  Jan 31  Comment 
* South Korea Forties demand had supported Brent backwardation
Mining Weekly  Jan 2  Comment 
The prompt naphtha inter-month premium dropped $1.25 per ton to a more than two-week low of an $11.75 backwardation on Wednesday, but physical fundamentals continued to be seen firm ahead of the Lunar New Year festivities in February. Naphtha...
Commodity Online  Dec 22  Comment 
and ldquo;During the rally, we maintained our short aluminium trade recommendation with the view that the run-up in prices was positioning-related and would be short lived. After the spike in spot prices to $2,193/t and a large backwardation...
FX Street  Nov 13  Comment 
Crude Yesterday, Brent crude lost about 0.3 percent and backwardation in the front-end of the... For more information, read our latest forex news and reports.
Wall Street Journal  Nov 5  Comment 
The market's so-called fear gauge ended Monday's session in an unusual state of worry, closing in "backwardation" for only the fourth time this year, as anxious investors looked toward elections now just hours away.
Wall Street Journal  Oct 23  Comment 
The market's so-called fear gauge briefly slipped into an unusual state of worry Tuesday.




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Backwardation means the price of a commodity for delivery at a future date is significantly lower than the current or "spot" price. This is an unusual condition, as a rational buyer will usually refuse to pay a higher price today if he is guaranteed a lower price tomorrow.

When it occurs, backwardation is usually the result of shortages.

The opposite of backwardation is Contango

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