Forward Curve Shifts by Market Structure and Frequency

All shift types:

• Parallel Upward

• Parallel Downward

• Steepening

• Flattening

• Butterfly (Mid-Hump/Mid-Dip)

Parallel Upward - Contango

• All prices rise, maintaining contango shape

  • Frequency: Moderate (Monthly-quarterly)

Parallel Downward - Contango

• All prices fall, maintaining contango shape

  • Frequency: Frequent (Weekly-monthly)

Steepening - Contango

• Long-term prices rise more than short-term prices

  • Frequency: Occasional (quarterly)

Flattening - Contango

• Short-term prices rise or long-term prices fall

• Frequency: Moderate (monthly)

Butterfly - Contango (Mid Hump)

• Mid-curve prices rise relative to front and back

• Frequency: Rare (event-driven)

Inversion - Contango to Backwardation

• Curve flips from contango to backwardation

  • Frequency: Rare (crisis-driven)

Parallel Upward - Backwardation

• All prices rise, maintaining backwardation

  • Frequency: Occasionally (monthly)

Parallel Downward - Backwardation

• All prices fall, maintaining backwardation

  • Frequency: Moderate (Monthly)

Steepening - Backwardation

• Spot prices rise more than future prices

  • Frequency: Frequent (weekly-monthly)

Flattening - Backwardation

• Spot prices fall or future prices rise

  • Frequency: Moderate (monthly)

Butterfly - Backwardation (Mid-Dip)

• Mid-curve prices fall relative to front and back

  • Frequency: Rare (event-driven)

Inversion - Backwardation to Contango

• Curve flips from backwardation to contango

  • Rare (market normalization)