Within the commodity markets, this term is widely used to identify prices for delivering closer and at a lower price with respect to those contracts with longer time deliveries. The origin of this term comes from the London Stock Exchange. Contango is the abbreviation of CONTinuation ANd GO. In the energy market context, this term is used to identify a situation where there is a bigger supply than demand and this makes a price reduction possible. This term is used in the oil sector even if it is applied to other commodities and in energy markets. In a situation without oil demand and supply shocks, the market might tend to a contango situation. The contrary of contango is backwardation.
Editor: Claudio DICEMBRINO

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