Futures Calendar Month Quote Difference

If later month contracts have higher price, can I assume that people are currently expecting price increase in the future?

The following pictures are for /NG and /CL. Do people expect price increase in /NG and price decrease in /CL in the future?



Thanks

 

The term is CONTANGO.

The opposite is BACKWARDATION.

 

Thank you. So the answer is 'Yes'.
"In broad terms, backwardation reflects the majority market view that spot prices will move down, and contango that they will move up" - https://en.wikipedia.org/wiki/Contango

 

When you think about future prices of some commodity think also about storage costs, possible insurance costs etc. etc. It's not only about expectations. Also - forward curves of CL ang NG looks very different.

 

A caveat... it is quite common for a "normal" futures curve to be in Contango.

 

Yep, 85-95% of contango for CL in last 10 years (depend on curve part)

But at the moment we have backwardation, not contango

 

Roll down the curve. Assume the curve doesnt change so a 6 mth contract eventually becomes 5 and so one