Backwardation

RECENT NEWS
Metal Bulletin  Aug 13  Comment 
Copper spreads returned to backwardation this week with prices nearly hitting one-year highs on Thursday as fund buying showed no sign of evaporating, tormenting an already-nervous market
Commodity Online  Aug 13  Comment 
The crude oil market's vacillations between contango and backwardation line up pretty well with oil inventories. As inventories build (demand wanes) a carrying charge market develops. When the thirst for oil remains unslaked the market tends to...
Metal Bulletin  Aug 7  Comment 
The forward market for over-the-counter iron ore swaps formed a backwardation as spot market prices reached their highest level this year, market participants told MB.
Mining Weekly  Jul 10  Comment 
Copper came under pressure on Friday as doubts about the speed and strength of economic recovery dominated market sentiment. Tin fell more than 5 percent for a third day running to hit a ten-week low of $12 000 on concerns about backwardation.
Commodity Online  Jun 18  Comment 
Unlike last year gasoline has been leading the energy complex in recent months. RBOB gasoline prices have almost doubled since the start of the year compared to an increase of just 25% for heating oil. Presently it is in backwardation but the...
Zero Hedge  Mar 6  Comment 
The recent run up in oil prices has resulted in some dramatic shifts along the crude curve. When we first discussed the contango effect (and some amusing risk free ideas as a result), the 12 month spread was roughly $25. Today's NYMEX...
Hard Assets Investor  Feb 10  Comment 
Real-time Inflation Indicator (per annum): 7.8% We at Hard Assets Investor have written about contango and backwardation many times. The message is worth repeating in times like these. Just what sort of times are these? And what the heck are...
Your Financial Future  Dec 14  Comment 
More on Gold Backwardation By James Turk http://www.kitco.com/ind/Turk/turk_dec122008.html Over the last few weeks, there have been a lot of articles on the Internet about backwardation, i.e., when the price of commodities for delivery...
World Beta - Engineering Targeted Returns and Risk  Dec 10  Comment 
I spent the past weekend in Colorado (go Broncos!), and looked through my father's library at some of my old books. I grabbed a copy of Shilling's Deflation to read on the plane ride home (which is currently listed for $600 since it is out of...
Your Financial Future  Dec 6  Comment 
Red Alert: Gold Backwardation!!! -- Posted Friday, 5 December 2008 Antal E. Fekete Gold Standard University Live December 2, 2008, was a landmark in the saga of the collapsing international monetary system, yet it did not deserve to be...
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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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