Research / Field note
Reading the WTI futures curve
Compare contract months at the same observation time and keep the sign convention explicit.
Prompt versus deferred
When a prompt contract is cheaper than a deferred one, that part of the curve is in contango. When the prompt contract is more expensive, it is backwardated. This guide defines a calendar spread as prompt minus deferred, so a negative result corresponds to contango for the chosen pair.
Why a curve can change
Storage, financing, physical availability and expected supply-demand conditions can influence relationships across months. A futures curve is a set of traded prices and does not provide a guaranteed path for future spot prices.
Avoid the front-month trap
A chart that rolls to the next contract can move even if no individual contract changes by that amount. Label both contract months, timestamp and unit. Never combine a spot date with a futures month without explaining the comparison.
Model a change
Open the Futures Exposure Lab to translate a hypothetical per-barrel change into contract dollars.