Forward Curve English (en) français (fr)

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The Forward Curve or Futures Curve is a line that plots prices of futures contracts having equal underlying product, but differing delivery dates.

The forward curve is often misinterpreted as a prediction model. Futures, not forecasts! [1],[2]

Different shapes

  • Contango, where near term contracts prices are lower than longer term ones
  • Backwardation, where near term contracts contracts prices are higher than than longer term ones

See also


  1. FT Alphaville, Energy forward curves are tricky for Bloomberg, by Izabella Kaminska, on 7 January 2009. "Bernanke himself fell into this same trap two years ago when crude was in a very steep backwardation, saying that the crude futures were predicting lower prices ahead and that that was a reason for the Fed to err upon the side of easier monetary policies. Instead the backwardation actually argued that crude inventories were tight and that prices were about to rise… materially… which they did." Last retrieved on 16 August 2013.
  2. Joseph G. Haubrich, Federal Reserve Bank of Cleveland, Oil prices: backward to the future?
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