Energy Futures

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Stress Monitor
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Checking market stress indicators...

Monitors 6 leading indicators for geopolitical/physical-flow stress. Thresholds calibrated to historical crisis levels (2005 Katrina, 2008 peak, 2022 Russia sanctions). Multiple indicators flashing simultaneously is a stronger signal than any single one.

Front-Month Contracts

Real-time front-month streaming quotes for the major CME energy contracts. WTI (/CL) and Brent (/BZ) are the global crude benchmarks; /RB and /HO are refined products (gasoline and heating oil, $/gal); /NG is US natural gas ($/mmbtu). Micro (/MCL, /MNG) contracts mirror the main products at 1/10th the size.

Root Description Contract Last Bid Ask Change Change % High Low Prev Close Volume
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Forward Curves
Contango (upward curve: far > near)
  • Storage holders are paid to carry inventory forward — the futures premium covers financing, insurance, and storage costs.
  • Signals ample/surplus near-term supply or weak spot demand.
  • Bearish near-term price signal. Negative roll yield for long futures positions (you sell the expiring contract low, buy the next month high each roll).
  • Seasonal contango is normal: /NG summer→winter, /HO summer→winter (heating demand), /RB winter→summer (driving season).
Backwardation (downward curve: near > far)
  • Spot premium — physical buyers pay up for immediate delivery, signaling inventory tightness or demand surge.
  • Indicates supply scarcity, refinery outages, or geopolitical stress. Common in crude during tight periods (2022 Russia/OPEC cuts).
  • Bullish spot signal. Positive roll yield for long positions — the primary driver of commodity index returns historically.
  • Deep backwardation (>5% across front months) is rare and usually mean-reverts as storage rebuilds.
Trading implications: A curve's shape is often more tradable than its level. Calendar-spread trades (buy near / sell far or vice versa) isolate the term-structure view without directional price risk. Curve shape also tells you whether passive long exposure (via ETFs like USO, UNG) will bleed from negative roll in contango or earn positive roll in backwardation.

Six-month forward strips for the major energy contracts. Each chart shows its own shape label — Contango if the strip slopes up, Backwardation if it slopes down.

Derived Spreads
Brent−WTI (/BZ − /CL, $/bbl)
  • Normal range: $2–$5. Reflects transport costs + quality differential between US landlocked WTI and waterborne Brent.
  • $5–$8: widening — US pipeline bottleneck or Brent geopolitical risk premium (Middle East, Russia).
  • $8+: dislocation — historically seen during Cushing storage overflow (2011–2014, 2020) or Mideast crises.
  • Negative (WTI > Brent): very rare — US supply disruption or strong domestic demand with constrained exports.
Trade ideas: long the spread (buy BZ, sell CL) when it's tight and US infra stress builds; fade extreme widenings (>$7) toward the mean. US refiners (VLO, MPC, PSX) benefit when WTI is cheap relative to Brent-linked product prices.
3-2-1 Crack ((2·RB + HO)·42 − 3·CL) / 3, $/bbl
  • Normal range: $10–$25. Represents refiner gross margin on 3 barrels of crude → 2 gasoline + 1 distillate.
  • $25–$40: strong margins — typically refinery outages (hurricane, fire) or unusual product demand.
  • $40+: exceptional — e.g. 2022 post-Russia sanctions, 2005 post-Katrina. Tends to mean-revert as refineries ramp up utilization.
  • <$5: margin compression — refiners lose money, capacity starts to shut, eventually bullish for refiner stocks.
Trade ideas: long refiner equities (VLO, MPC, PSX, DK) when crack widens above trend; futures crack-spread package (buy RB & HO, sell CL) for direct exposure. Seasonally widens in late spring as driving season starts, narrows in Oct–Nov shoulder.
WTI M2−M1 (next month − front month /CL, $/bbl)
  • Near zero (±$0.20): balanced market, carry ≈ storage cost.
  • Positive (contango): oversupply or weak spot demand. $0.50+ suggests building inventories.
  • Negative (backwardation): spot tightness. $-0.50 to $-1 is meaningful; $-2+ is severe (2022 Russia-sanctions regime).
  • Front-month expiry effects: spread can be erratic in the last week before WTI rolls, especially around the NYMEX settlement window.
Trade ideas: calendar-spread positions isolate term-structure without directional price risk. Backwardation > $1 is bullish for long-USO/UCO holders via positive roll yield; contango > $0.50 is bearish — long-futures ETFs will bleed ~2–4% per roll.
NG M2−M1 (next month − front month /NG, $/mmbtu)
  • Highly seasonal — don't compare to crude spreads naïvely. NG prices step up into winter (heating), down into shoulder seasons.
  • Apr–Oct: usually positive contango reflecting storage injection through shoulder months into winter premium.
  • Nov–Feb: can flip negative if cold snap forecasts pull spot higher than near-winter.
  • $0.30+ summer contango: building storage cushion for winter; >$0.50 is above trend.
  • Extreme backwardation in winter: signals immediate heating demand outpacing production (pipeline freezeoffs, polar vortex).
Trade ideas: weather-driven calendar spreads (long near / short far when cold event expected, reverse during mild forecasts). Seasonal pair trades (March–April vs October–November) benefit from the reliable withdrawal-season rollover.
General principle: spreads revert to structural means much more reliably than outright prices do. A spread trader targets convergence to the long-run average, not absolute direction. The challenge is that "structural means" shift over time (e.g. post-shale WTI curve changed permanently ~2012), so always check a multi-year chart before assuming a spread is "rich" or "cheap".

Key energy spreads that traders watch for relative-value and term-structure signals.

Brent−WTI ($/bbl)
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Global crude premium
3-2-1 Crack ($/bbl)
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Refiner gross margin
WTI M2−M1 ($/bbl)
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Contango if > 0
NG M2−M1 ($/mmbtu)
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Natural gas calendar
Forward Strip Snapshot

Raw monthly contracts streaming from Schwab for /CL, /NG, and /BZ.

Product Contract Month Last Bid Ask Change Volume
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