The oil futures curve shows the price of crude oil for delivery at different points in the future. It’s the single most important chart for understanding market expectations about supply, demand, and price direction.
What is the Futures Curve?
When you see “Brent crude at $75,” that’s the front-month (M1) futures price — the contract expiring soonest. But you can also buy oil for delivery in 2, 3, 6, or 12 months. The futures curve plots all these prices together, revealing the market’s forward expectations.
Reading the Curve
- Upward slope (contango): Future prices higher than spot. Signals adequate supply and storage play opportunities.
- Downward slope (backwardation): Spot prices higher than future. Signals tight supply and strong demand now.
- Flat curve: Market sees no significant change in supply/demand balance ahead.
- Kinked curve: A specific month is priced differently — could signal seasonal factors, OPEC meeting expectations, or contract rollover effects.
Key Contracts to Watch
- Brent M1-M12: ICE Brent futures, the global benchmark. 12 monthly contracts.
- WTI M1-M12: NYMEX WTI futures, the US benchmark. Highly liquid.
- M1-M3 time spread: The short-term supply/demand indicator traders watch most closely.
- M1-M12 time spread: The full-year view of market structure.
How Professionals Use the Curve
- Oil producers use the curve to decide when to hedge production — locking in forward prices when backwardation fades
- Airlines & refiners hedge fuel costs by buying deferred contracts when the curve is flat or in contango
- Commodity traders trade the spreads between months (calendar spreads) rather than outright prices
- ETF investors need the curve to understand roll yield — the hidden cost of owning oil ETFs in contango
Track the Live Futures Curve
View Brent and WTI futures curves with M1-M12 prices on our Oil Prices & Market Dashboard, updated throughout the trading session.