Contango

RECENT NEWS
OilVoice  Nov 11  Comment 
Contango Oil Gas Company NYSE MKT MCF announce its financial results for the three months ended September 30 2014 and provided an operational update. Allan D. Keel the Companyrsquos Presiden
Reuters  Nov 3  Comment 
The U.S. crude oil futures market dipped into a contango structure on Monday afternoon as the price for January delivery exceeded the price for December delivery. The short-term U.S. crude market has not reached contango since January 17.
Reuters  Oct 24  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




 

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.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki