Backwardation in the oil market, explained Backwardation is something that happens in the futures market when if you buy a barrel of oil to...
Backwardation in the oil market, explained
Backwardation is something that happens in the futures market when if you buy a barrel of oil to be delivered in a month or a year from now, it's cheaper than if you buy it today. This phenomenon illustrates one of the reasons why oil is in short supply right now. Namely that investors and companies don't want to invest in oil extraction and infrastructure for an asset that's going to be worth less that it is doing today.
Read more on NPR
Backwardation is something that happens in the futures market when if you buy a barrel of oil to be delivered in a month or a year from now, it's cheaper than if you buy it today. This phenomenon illustrates one of the reasons why oil is in short supply right now. Namely that investors and companies don't want to invest in oil extraction and infrastructure for an asset that's going to be worth less that it is doing today.
Read more on NPR
