However, the appearance of contango in the crude oil term structure over the past three years has meant the benefits of a positive roll return have disappeared and have been replaced by a negative roll return.
32.
As a result, Source launched "'Source Crude Oil Enhanced T-ETC "'which uses dynamic rolling rules in order to mitigate the effects of contango in the oil futures markets.
33.
Forward sales allow producers to obtain prices higher than prevailing market rates by capturing the market's " contango, " or the difference between prices for current delivery and those for delivery months later.
34.
A sign that supplies are greater than demand came last week when Nymex crude oil futures switched into " contango, " where prices for delivery later in the year are higher than prices for delivery now.
35.
This fee was similar in character to the present meaning of contango, " i . e . ", future delivery costing more than immediate delivery, and the charge representing cost of carry to the holder.
36.
If such is the case, the premium may have ended when global oil storage capacity became exhausted; the contango would have deepened as the lack of storage supply to soak up excess oil supply would have put further pressure on spot prices.
37.
He argues that the result was a'contango'wheat market on the Chicago Mercantile Exchange, which caused prices of wheat to rise much higher than normal, defeating the purpose of the exchanges ( price stabilization ) in the first place.
38.
The disadvantages include a negative roll yield due to contango in certain commodities, although this can be reduced by active management techniques, such as reducing the weights of certain constituents ( e . g . precious and base metals ) in the index.
39.
Because the normal course of a futures contract in a market in contango is to decline in price, a fund composed of such contracts buys the contracts at the high price ( going forward ) and closes them out later at the usually lower spot price.
40.
Heating oil futures fared better, skidding about 1.5 cents to an intraday low of 69 cents a gallon, as traders found futures, now in contango, profitable to store, before closing at 69.73 cents a gallon, down . 86 cent.
