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Dear readers, I would like to share with you some useful plots about oil price dynamic and its correlation with contango. Below is depictured contango/backwardation history for oil futures in comparison to oil price fluctuation.
Main conclusions are following
Oil price in downtrend matched with contango appearance. The depth of contango tightly correlate with scale of the crisis. Cyclical crisis with deep issues in supply/demand in oil market as rule related with super contago periods.
For virus crisis super contango reached a hugest expression and that reflect how deep and unprecedented is the current crisis.
Contango erode the price of USO (based on WTI futures) and BNO (based on Brent futures)