Contango

RECENT NEWS
Reuters  5 hrs ago  Comment 
* Ample prompt supplies threatened contango in U.S. crude
SeekingAlpha  Sep 30  Comment 
By Nathan Buehler: Contango and Backwardation strategy for ProShares Ultra VIX Short-Term Futures ETF (NYSEARCA:UVXY) This is an update to the contango and backwardation strategy I published on 7/28/2014 - you may view those articles here: ...
SeekingAlpha  Sep 22  Comment 
By HiddenValueInvestor: Contango (NYSEMKT:MCF) and U.S. Energy (NASDAQ:USEG) are sitting in a very sweet oil spot on the Zavala and Dimmit county line in South Texas. The Booth-Tortuga lease currently has 13,403 gross acres operated by Contango...
BusinessWeek  Sep 17  Comment 
Oil traders are rushing to find a place to store their cheap crude
SeekingAlpha  Sep 16  Comment 
By Lior Cohen: Natural gas remained relatively unchanged on a weekly scale as the Henry Hub slightly rose by 0.3% to reach $3.86. United States Natural Gas (NYSEARCA:UNG) rose by 1%. Conversely, U.S natural gas producers such as Chesapeake Energy...
Financial Times  Sep 10  Comment 
Oil traders are taking advantage of a ‘contango’ in the pricing structure and buying at cheaper spot prices and selling at more expensive forward delivery rates
SeekingAlpha  Sep 8  Comment 
By Prudent Finances: By Ivan Y. U.S. Natural Gas fund (NYSEARCA:UNG) attempts to track the price of natural gas, but since its creation in 2007, it has failed miserably to do so. UNG's underperformance relative to the spot price of natural...
Commodity Online  Sep 8  Comment 
Assuming maintenance proceeds as scheduled, imports remain elevated, and global product demand remains lacklustre, US crudes could come under pressure, raising the likelihood of a contango forming in WTI. The supply and demand balance continues to...
DailyFinance  Sep 4  Comment 
Contango ORE, Inc. (“CORE”) (OTCBB: CTGO.PK) (The Company) has announced today that it filed its Form 10-k for the year ended June 30, 2014 with the Securities and Exchange Commission. The Company reported a net loss of...
SeekingAlpha  Aug 26  Comment 
By Prudent Finances: By Ivan Y. In one of my first articles on Seeking Alpha, I suggested that U.S. Oil Fund (NYSEARCA:USO) was a sucker's bet due to contango in WTI crude oil. Contango is when the near-month contracts for WTI oil are cheaper...




 

This article refers to a futures concept. For the oil & gas company, see Contango Oil & Gas Company (MCF).

Contango means the price of a commodity for delivery at a future date is significantly higher than the current or "spot" price, which makes it profitable for companies to store the commodity and enter into contracts to sell futures contracts on the commodity, even after accounting for storage costs and opportunity cost of capital (i.e. money tied down on the inventory not earning a return).

The situation persists untill the futures prices come down or current prices go up or the cost of storage becomes very high.

This situation is also referred to as an upward sloping forward curve.

The opposing market condition to contango is backwardation.

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