Settlement days were on a fixed schedule ( such as fortnightly ) and a speculative buyer did not have to take delivery and pay for stock until the following settlement day, and on that day could " carry over " their position to the next by paying the contango fee.
42.
When markets are in contango, futures prices are expected to decline . " In 1972 Hicks won the Nobel prize for economics on the basis of Value and Capital, on the economic equilibrium theory, in particular the issue of the stability of equilibrium in an economic system exposed to external shocks.
43.
In a contango situation, hedgers ( commodity producers and commodity users ) or arbitrageurs / speculators ( non-commercial investors ), are " willing to pay more [ now ] for a commodity at some point in the future than the actual expected price of the commodity [ at that future point ].
44.
The contango exhibited in Crude Oil in 2009 explains the discrepancy between the headline spot price increase ( bottoming at $ 35 and topping $ 80 in the year ) and the various tradeable instruments for Crude Oil ( such as rolled contracts or longer-dated futures contracts ) showing a much lower price increase.
45.
The Oil Storage Contango was introduced on the market in early 1990 by the Swedish-based oil storage company Scandinavian Tank Storage AB and its founder Lars Jacobsson by using huge military storage installations to bring down the " calculation " cost on storage to create the Contango situation out of a " flat " market.
46.
The Oil Storage Contango was introduced on the market in early 1990 by the Swedish-based oil storage company Scandinavian Tank Storage AB and its founder Lars Jacobsson by using huge military storage installations to bring down the " calculation " cost on storage to create the Contango situation out of a " flat " market.
47.
This was reflected in the reversal of the normal market structure of " contango "-in which cash prices are at a discount to forward positions, representing the costs of holding physical material ( storage, insurance and foregone interest )-into " backwardation "-where cash prices are at a premium.
48.
"I think ( BPA ) splitting up is a good thing, but it will disallow them to capitalize on one thing that's been one of their best assets over time, and that's transmission, " said Michael Canterbury, a consultant with Portland-based Contango Energy Inc ., and former BPA employee.
49.
The contango exhibited in Crude Oil in 2009 explains the discrepancy between the headline spot price increase ( bottoming at $ 35 and topping $ 80 in the year ) and the various tradeable instruments for Crude Oil ( such as rolled contracts or longer-dated futures contracts ) showing a much lower price increase, because of the strong negative roll yield.
50.
The futures or forward curve would " typically " be upward sloping ( i . e . " normal " ), since contracts for further dates would typically trade at even higher prices . ( The curves in question plot market prices for various contracts at different maturities cf . term structure of interest rates ) " In broad terms, backwardation reflects the majority market view that spot prices will move down, and contango that they will move up.
