Derivatives • Term Structure
Reading Futures Curves & Forward Term Structures
How to analyze upward sloping, inverted backwardation, and seasonal term structure curves across commodities and rates.
Author: CMD Wire Institutional Research
Updated: August 2026 • 5 min read
1. What Is a Futures Forward Curve?
A Futures Curve plots the prices of all actively traded futures contracts for a specific commodity or financial benchmark against their expiration delivery dates. The shape of the curve provides the clearest market-implied snapshot of future supply, storage availability, and policy expectations.
2. Key Curve Structures
- Upward Sloping (Normal Contango): Ample physical inventories; market incentivizes commercial producers to store inventory for future delivery.
- Downward Sloping (Inverted Backwardation): Inventory deficits; buyers pay an immediate premium for spot physical delivery (e.g. crude oil during geopolitical crises).
- Humped / Seasonality Curves: Distinct structural price peaks reflecting seasonal demand (e.g. Natural Gas peaking in January winter delivery, RBOB Gasoline peaking in June summer driving season).