Energy futures

How to read this page

This dashboard is built around three layers of information. The Stress Monitor at the top is the fastest read — it consolidates six independent indicators of geopolitical and physical-flow stress into a single severity tier (Normal, Watch, Elevated, or Severe) and a plain-English narrative. Multiple indicators flashing at the same time is a much stronger signal than any single one moving on its own, which is why the narrative explicitly tracks how many of the four core signals (Brent–WTI, WTI calendar, WTI 1-day percent change, and gold 1-day percent change) are simultaneously elevated. Three or more is treated as confirmed stress; two is an early warning.

The Front-Month Contracts table and Forward Curves charts give you the underlying price action and term structure. The curves are the real source of information about whether the market is in contango (later contracts more expensive than the front month, indicating ample supply) or backwardation (front month more expensive, indicating spot tightness). The Derived Spreads cards distill that term structure plus the cross-product Brent–WTI and crack spreads into four numbers traders monitor every day. The Tanker Freight card tracks the cost of shipping crude by sea through BWET, an ETF holding supertanker freight futures on the Middle East Gulf → China route — when tankers get scarce during a supply shock, freight often moves far more than crude itself. The Forward Strip Snapshot table is the raw data behind the curve charts, useful when you need exact prices for spread sizing.

Thresholds throughout the dashboard are calibrated to historical crisis levels: Hurricane Katrina (August–September 2005), the 2008 oil super-spike to $147 and subsequent crash to $33, the April 20, 2020 negative WTI settlement, and the 2022 Russia–Ukraine sanctions period. When a signal crosses into the "Severe" band, you are looking at a value that historically only printed during one of those episodes — it deserves attention even if no headline has dropped yet.

Energy futures stress signals explained

The Stress Monitor on this page tracks six independent indicators of geopolitical and physical-flow stress in the energy complex. Each signal has three thresholds (Watch, Elevated, Severe) calibrated to historical crisis levels. The signals are deliberately diverse — some measure geographic dislocations, some measure term-structure tightness, some measure cross-asset risk-off — so that a synchronized move across multiple indicators carries far more information than any one signal moving on its own.

1. Brent–WTI spread (/BZ − /CL)

Formula: Brent − WTI, both expressed in dollars per barrel. Thresholds: Watch ≥ $5.00, Elevated ≥ $6.50, Severe ≥ $8.00.

The Brent–WTI spread captures the price gap between waterborne global crude (Brent, traded on ICE) and US-landlocked crude (WTI, traded on NYMEX with physical delivery at Cushing, Oklahoma). In a balanced market the spread reflects only transportation costs from Cushing to coastal export terminals plus a small quality differential — typically $2 to $5 per barrel. When the spread widens through $6, something has changed: either a non-US supply tightness is bidding Brent higher (Middle East disruption, Russia sanctions, OPEC+ cuts), or a US infrastructure constraint is keeping WTI artificially cheap (Cushing storage saturation, pipeline outage). At $8 and above, you are in dislocation territory, though not always in a crisis. About three in four $8+ days since 2015 came between May 2018 and June 2019, when Permian output outran pipeline capacity. The same level marked the 2011–2014 US shale boom (when Cushing was overwhelmed), the 2022 Russia–Ukraine supply crunch and 2026.

2. WTI calendar spread (M2 − M1, backwardation)

Formula: WTI next-month price − WTI front-month price, in $/bbl. A negative number indicates backwardation; a positive number indicates contango. Thresholds: Watch ≤ −$2.00, Elevated ≤ −$5.00, Severe ≤ −$8.00.

Deep backwardation — where the front month trades at a sharp premium to the next month — is a direct signal of physical spot tightness. In a normal market, the spread is close to zero (storage cost ≈ convenience yield), drifting slightly into contango when inventories are healthy. Backwardation greater than $2 means physical buyers are paying up for immediate delivery, a classic symptom of refinery turnarounds, OPEC+ supply discipline, or sudden geopolitical disruption to flows. The Severe threshold of −$8 is rare: the spread reached it on one day in September 2008 and again in spring 2026. Even at the height of the 2022 Russia-sanctions period, when European refiners were scrambling for non-Russian crude, it bottomed at about −$4.

3. Natural gas calendar spread (NG M2 − M1)

Formula: NG next-month price − NG front-month price, in $/mmbtu. Thresholds: |value| ≥ $0.50 Watch, ≥ $0.75 Elevated, ≥ $1.00 Severe.

Natural gas calendar spreads use absolute thresholds because the seasonality is severe in both directions: April–October typically shows positive contango as inventories build for winter, while November–February can flip negative on cold-snap forecasts. A spread above $0.75 outside winter, or below −$0.75 in summer, is unusual and often coincides with major weather events, LNG export disruption, or storage-level surprises. Qatar accounts for roughly 20% of seaborne LNG, so any disruption to the Strait of Hormuz can spike this signal independently of US weather. Note that natural gas should never be compared naively to crude calendars — the structures behave differently because of withdrawal-season storage dynamics that have no direct analog in oil.

4. 3-2-1 crack spread

Formula: ((2 × RBOB × 42) + (HO × 42) − 3 × WTI) / 3, in $/bbl. RBOB and heating oil are quoted in dollars per gallon, and the multiplier 42 converts to dollars per barrel (there are 42 US gallons in a barrel). Thresholds: Watch ≥ $30, Elevated ≥ $40, Severe ≥ $55.

The 3-2-1 crack spread is the single most-watched proxy for refiner gross margin. It assumes the standard refiner yield: three barrels of crude input produce roughly two barrels of gasoline (RBOB) and one barrel of distillate (heating oil / ULSD). A normal spread is $10–$25/bbl; sustained crack above $30 means refined products are scarce relative to crude, usually because of refinery outages (hurricanes, fires, planned turnarounds) or unusual product demand (driving season, cold winter). Above $40 is historically exceptional. Above $55 marks crisis peaks: Hurricane Katrina (September 2005) and the post-Russia-sanctions period (mid-2022), both episodes where multiple Gulf or European refineries were offline simultaneously, and 2026, when it held above $55 from late June to late October and peaked near $76.

5. WTI 1-day percent change

Formula: |(WTI today − WTI yesterday) / WTI yesterday| × 100. Thresholds: |value| ≥ 3% Watch, ≥ 5% Elevated, ≥ 8% Severe.

Outside of OPEC meetings and major geopolitical events, daily moves in crude rarely exceed 3%. A 5% single-day move is almost always news-driven — emergency OPEC+ cuts, major pipeline outage, sanctions announcement, or sudden risk-off. An 8% move is crisis tape, the kind of session that makes the front page of the Wall Street Journal. This signal is bidirectional (absolute value) because both sharp rallies and sharp selloffs reflect a regime change in the way the market is processing information.

6. Gold 1-day percent change (cross-asset confirmation)

Formula: (GC today − GC yesterday) / GC yesterday × 100. Thresholds: ≥ 1.0% Watch, ≥ 1.75% Elevated, ≥ 3.0% Severe.

Gold is included as the cross-asset confirmation indicator. When oil moves sharply on idiosyncratic news (an OPEC announcement, a refinery accident), gold typically does not respond. But when oil moves on genuine geopolitical risk (war, sanctions, sovereign instability), gold moves with it because the same risk-off impulse that bids commodities also bids the safe-haven asset. A synchronized move — Brent–WTI widening, oil up, gold up — is much more reliably a real geopolitical regime shift than oil moving alone.

How the narrative is computed

The Stress Monitor narrative aggregates the six signals using a simple voting rule across the four core indicators: Brent–WTI spread, WTI calendar spread, WTI 1-day percent change, and gold 1-day percent change. (The natural gas calendar and 3-2-1 crack feed into the active-alert count but do not enter the narrative vote, because they can fire for non-stress reasons — seasonality and refinery economics, respectively.)

• CONFIRMED STRESS — three or more of the four core signals are at Elevated or Severe simultaneously. This is a strong, multi-confirmation read.
• EARLY STRESS SIGNAL — exactly two of the four are at Elevated or Severe. The setup is forming but not yet confirmed.
• ELEVATED BUT MIXED — three or more signals are active across all six indicators, but the core four are not aligned. Often happens when crack and NG calendar both fire on idiosyncratic causes.
• WATCHING — one or two signals above baseline; nothing systemic yet.
• ALL NORMAL — zero signals at or above the Watch tier. Quiet tape.

Contango and backwardation: a complete guide

What is contango?

Contango is a futures-curve shape in which contracts further from expiration trade at higher prices than nearer-dated contracts. In the simplest formulation, the cost-of-carry equation says F = S · e^((r + u − y) · (T − t)), where F is the futures price, S is the spot price, r is the risk-free interest rate, u is the storage cost rate, and y is the convenience yield (the value of holding the physical commodity). When carrying costs (interest plus storage) exceed the convenience yield, the curve slopes upward — contango. Intuitively: storage-holders need to be paid to warehouse the commodity, and the futures premium covers their financing, insurance, and tank-rental costs. Contango is the normal state of well-supplied commodity markets.

What is backwardation?

Backwardation is the inverse — front-dated contracts trade at a premium to deferred contracts. This happens when the convenience yield y exceeds carrying costs, meaning the market values immediate physical possession highly enough that it overwhelms storage economics. Backwardation signals spot tightness: physical buyers are competing for delivery now, refiners are running hard, inventories are below comfort levels. It is the normal state of stressed commodity markets and tends to appear during refinery turnarounds, OPEC+ supply discipline, geopolitical crises, or weather-driven demand surges. Deep backwardation greater than 5% across the front strip is rare and historically mean-reverts within months as storage rebuilds.

Roll yield: why curve shape matters for ETFs like USO and UNG

Roll yield is the gain or loss generated when an expiring futures contract is sold and the next month is purchased. In contango, you sell the cheap expiring contract and buy the more-expensive next month — that is negative roll yield, and it accumulates monthly for any passive long position. In backwardation, the trade is reversed: sell the expensive front month, buy the cheaper next month, capture positive roll yield. Passive long-commodity ETFs like USO (oil) and UNG (natural gas) carry this exposure mechanically. During the 2008–2009 super-contango, USO holders saw double-digit annualized roll decay; during the 2022 deep-backwardation oil regime, similar passive positions captured double-digit positive roll. This is why curve shape, not just price level, is the dominant driver of long-term commodity-index returns.

Seasonal patterns to know

• Natural gas (/NG): structural summer-to-winter contango. April–October contracts typically trade below January–March contracts because the market needs to incentivize storage operators to inject gas now for winter withdrawal. This is normal seasonality, not a stress signal.
• Heating oil (/HO): similar summer-to-winter contango. Northeast heating demand peaks in January–February, so winter contracts carry a premium.
• RBOB gasoline (/RB): winter-to-summer contango. Driving-season demand peaks May–August, so summer contracts trade at a premium to winter contracts. This pattern is mirrored in the 3-2-1 crack spread, which widens through spring and narrows in October–November.
• WTI / Brent (/CL, /BZ): no strong seasonality. Curve shape is driven by inventory, OPEC+ policy, and geopolitics.

Historical episodes

2008–2009 super-contango. The financial crisis collapsed crude demand while production continued. Cushing storage filled to capacity and traders bid up later-dated contracts to lock in storage arbitrage. The WTI curve was in contango of more than $20 per barrel at the M1–M12 spread for sustained periods, the deepest contango on record before 2020. Floating-storage (oil tankers chartered solely to hold crude) reached record levels.

April 20, 2020 — negative WTI. May WTI settled at −$37.63 per barrel as Cushing storage approached saturation and longs facing physical delivery were forced to pay traders to take the contract off their hands. The deferred contracts (June, July) remained positive but in deep contango. CME has since adjusted limit and margin rules to reduce the probability of negative settlements, but extreme contango remains a possibility whenever storage approaches capacity.

2022 deep backwardation. Russia's invasion of Ukraine and the resulting sanctions on Russian crude, combined with disciplined OPEC+ production restraint, produced one of the deepest sustained backwardations in WTI history — M1–M2 ran at −$2 to −$3 for months. Refiners worldwide were scrambling for non-Russian barrels, and the Brent–WTI spread widened past $9 as European demand competed for seaborne crude.

Brent–WTI spread

Why the spread exists

Brent and WTI are both light, sweet crudes with similar API gravity and sulfur content — chemically they are close substitutes for refining purposes. The price gap between them is driven almost entirely by geography. WTI is delivered physically at Cushing, Oklahoma, an inland storage hub connected to the Gulf Coast and Midwest by pipeline. Brent is a waterborne benchmark priced for delivery at Sullom Voe (Shetlands), giving it direct access to global seaborne markets. In a balanced world, the spread reflects the cost of moving WTI from Cushing to a coastal export terminal plus a small quality adjustment — typically $2 to $5 per barrel, with Brent at the premium because of its global-market optionality.

Normal range and what widening means

• $2 to $5 — normal. Reflects the basic transportation differential.
• $5 to $8 — Watch / Elevated. Either a US infrastructure constraint is bottling up WTI (Cushing storage filling, pipeline outage, weak export economics), or non-US geopolitical risk is bidding Brent higher (Middle East tensions, Russia sanctions, OPEC+ supply cuts).
• $8+ — dislocation. Historically tied to specific episodes: 2011–2014 US shale boom overwhelming Cushing infrastructure, May 2018 to June 2019 Permian pipeline limits (about three in four of the $8+ days since 2015), 2020 Cushing storage overflow, 2022 Russia–Ukraine seaborne supply crunch, and 2026.

When the spread inverts

WTI trading at a premium to Brent — a negative spread — is rare but not impossible. It typically requires a US-specific supply disruption (a major Gulf hurricane shutting in offshore production, a pipeline rupture between Permian and Cushing) combined with constrained export capacity, so domestic crude bids up relative to the seaborne benchmark. The 2022 OPEC+ regime briefly saw negative spreads when European demand for non-Russian barrels shifted relative pricing; these episodes tend to be short-lived because US export infrastructure is now sufficient to clear most arbitrage opportunities.

Trade structures traders consider

• Long the spread (buy /BZ, sell /CL) when the spread is unusually tight and US infrastructure stress is building, or when non-US geopolitical risk premia look mispriced low.
• Fade extreme widening back toward the $5 mean once the underlying catalyst has passed and infrastructure or sanctions arbitrage starts to clear.
• Refiner equity proxies (VLO, MPC, PSX, DK) benefit when WTI is structurally cheap relative to Brent-linked refined products — domestic refiners pay WTI input costs but can sell into Brent-priced product markets.

Educational framing only. None of the above is personalized investment advice.

3-2-1 crack spread

The refining math

The 3-2-1 crack spread approximates a US refiner's gross margin per barrel of crude input, using the standard yield assumption: three barrels of crude produce roughly two barrels of gasoline (RBOB) and one barrel of distillate (heating oil / ULSD). The formula is:

Crack ($/bbl) = ((2 × RBOB × 42) + (HO × 42) − 3 × WTI) / 3

The multiplier 42 converts dollars per gallon (the unit RBOB and heating oil trade in) to dollars per barrel (the unit WTI trades in), since one US barrel contains 42 gallons. Dividing the entire result by 3 expresses the spread per barrel of crude rather than per three-barrel package.

Worked example. Suppose WTI is $78/bbl, RBOB is $2.20/gal, and heating oil is $2.50/gal. Then: (2 × 2.20 × 42 + 2.50 × 42 − 3 × 78) / 3 = (184.80 + 105.00 − 234.00) / 3 = 55.80 / 3 = $18.60/bbl. That is squarely in the normal range — a healthy but unexceptional refining margin.

Seasonal pattern

Crack spreads follow a reliable annual cycle in the United States. They begin widening in March–April as refineries shift to summer-grade gasoline blending and demand ramps into the Memorial-Day-through-Labor-Day driving season. Peak spread typically prints in May–July. Through August the curve compresses as refinery utilization peaks and product inventories rebuild. October–November is the low season — refineries enter fall maintenance turnarounds and gasoline demand drops off. The cycle resets in winter as heating-oil demand supports the distillate side of the crack.

What blowouts mean

• $25 to $40 — strong margins. Usually refinery outages (hurricanes, fires, unplanned shutdowns) or surprise demand strength.
• $40+ — historically exceptional. Sustained spreads above $40 require multiple refineries offline simultaneously or a structural product-supply shortfall.
• $55+ — crisis levels. Seen during Hurricane Katrina (Sep 2005, multiple Gulf refineries inundated), the post-Russia-sanctions period (mid-2022, European product shortages forcing Atlantic-basin reallocation) and 2026 (above $55 from late June to late October, peaking near $76).
• Below $5 — margin compression. Refiners lose money, capacity starts to shut, eventually bullish for refiner equities as supply rationalizes.

Trade structures

• Long refiner equities (VLO, MPC, PSX, DK) when the crack widens above trend with margins likely to persist.
• Futures crack package: long /RB and /HO, short /CL in a 2:1:3 ratio. This is the direct derivatives expression of the crack.
• Calendar trades on the crack itself: long the summer crack, short the winter crack, capturing seasonal widening.

Educational framing only. Crack-spread positions involve multiple legs and should be sized with awareness of execution and rolling risk.

Calendar spreads (M2 − M1) for WTI and natural gas

WTI M2 − M1 mechanics

The WTI calendar spread is the cleanest term-structure indicator for crude. In a balanced market, the spread sits near zero — storage cost roughly equal to convenience yield. Positive spread (contango) of $0.50 or more suggests inventories are building or spot demand is weak; negative spread (backwardation) of $0.50 or more suggests spot tightness. The spread becomes erratic in the final week before WTI rolls because the front month thins out and price discovery shifts to the deferred contract; that noise is structural and should not be confused with a regime change.

NG M2 − M1 seasonality is different

Natural gas calendar spreads do not behave like crude. Storage operators inject gas during the April–October "build" season for winter withdrawal, so the front month (summer) tends to trade below the next month (early winter) — natural contango. November–February often sees the spread flip negative as cold-snap forecasts pull spot prices above the next month. Treating an NG calendar spread the same way you would a WTI calendar spread will lead to bad inferences. Always check the calendar season before reading the signal.

Roll mechanics for retail futures traders

Retail futures traders rolling between contracts need to be aware of two things. First, the calendar spread is what determines whether the roll generates a credit or a debit — long positions in backwardation collect a credit on roll, while long positions in contango pay a debit. Second, expiry conventions matter: WTI front-month expiry is on the third business day prior to the 25th of the month preceding the delivery month, while natural gas expires three business days before the first calendar day of the delivery month. Most retail brokers automatically prompt rolls 5–7 business days before expiry. Rolling earlier in the cycle (when liquidity is concentrated in the front month) tends to produce tighter execution than rolling at the last minute.

Trade ideas by market regime

The dashboard's stress-monitor narrative classifies the market into a regime. Different regimes call for different trade structures. Below are strategies that traders commonly consider in each — framed educationally, not as personalized recommendations.

Regime: Confirmed geopolitical stress

Three or more core signals at Elevated or Severe — Brent–WTI wide, WTI backwardated, large daily moves, gold rallying.

• Long /BZ vs short /CL — directly expresses the seaborne stress thesis.
• Long refiner equities (VLO, MPC, PSX, DK) — beneficiaries of cheap WTI input + expensive Brent-linked product output.
• Long /GC (gold) as a safe-haven hedge that has historically held its bid during energy-driven risk-off.
• Long /CL options (calls or call spreads) to express directional crude with defined risk if vol is reasonable.

Regime: Contango / glut

WTI calendar spread positive, curve sloping up, low backwardation pressure across the strip.

• Avoid passive long-USO/UNG exposure — negative roll yield will compound monthly.
• Calendar spread: sell front, buy deferred — captures the natural roll-down as the spread flattens.
• Refiner-equity selectivity — refiners with crude-cost advantages (Permian access) outperform in low-WTI environments.
• Storage-arbitrage thinking for sophisticated traders: floating-storage trades become profitable at sufficient deferred-month premiums.

Regime: Backwardation

WTI calendar spread negative, refiner margins healthy, no acute geopolitical headlines but physical tightness present.

• Calendar spread: buy front, sell deferred — earns the convergence as the spread tightens or as the curve rolls through your position.
• Passive long via /USO can earn positive roll if the regime persists — though always monitor for shift back to contango.
• Integrated-major equity exposure (XOM, CVX) benefits from sustained higher crude prices without taking pure refiner crack risk.
• Short-duration crude vol selling can be attractive when realized vol is contained but term structure is tight.

Regime: Mean-reversion / all normal

Stress monitor at All Normal, spreads in mid-range, no narrative active.

• Range-bound vol selling — short straddles or strangles on /CL when realized vol is low and spreads are calm.
• Fade extreme spreads back to mean — Brent–WTI tight or wide of long-run average, calendar spread off-trend.
• Pair trades within the energy complex — long /CL vs short /BZ if the spread is unusually wide, or vice versa.
• Seasonal trades — long the summer crack vs winter crack, long /HO into winter, etc.

Educational framing only. None of the above is personalized investment advice. Position sizing and risk management depend on individual circumstances, time horizon, and capital base.

Historical energy stress episodes

The thresholds in the Stress Monitor are calibrated against the historical record of energy-market crises. Each of these episodes printed extreme readings on multiple signals simultaneously — the kind of synchronized move the monitor is designed to detect.

Hurricane Katrina (August–September 2005)

Katrina made landfall on August 29, 2005, knocking out roughly 10% of US refining capacity along the Gulf Coast and shutting in approximately 1.5 million barrels per day of offshore crude production. The 3-2-1 crack spread spiked above $50/bbl as gasoline supply collapsed in the immediate aftermath. WTI ran to $70 (then a record), and the WTI calendar spread inverted into deep backwardation as refiners scrambled for available crude. The episode established the modern $55+ crack threshold as the "Severe" calibration.

2008 super-spike and crash

WTI peaked at $147.27 on July 11, 2008, on a combination of weak dollar, supply concerns, and speculative inflows. The curve was in shallow backwardation through the spike. By late December 2008, in the depth of the financial crisis, WTI had collapsed to $33 with the curve in record contango — Cushing storage filling, floating storage proliferating, and the M1–M12 spread approaching $20. Both extremes — the rally and the crash — exceeded the 8% daily-move threshold on multiple sessions.

Negative WTI (April 20, 2020)

The May 2020 WTI contract settled at −$37.63 on April 20, 2020 — the first-ever negative settlement for a major US crude futures contract. The proximate cause was Cushing storage approaching saturation just as the front-month contract approached expiry, forcing longs facing physical delivery to pay counterparties to take the contract off their hands. The deferred months stayed positive but in extreme contango ($20+ M1–M3). CME has since adjusted limit and margin rules; the same magnitude is unlikely to recur identically, but extreme contango remains possible whenever physical storage approaches capacity.

Russia–Ukraine and OPEC+ tightening (2022)

Russia's February 2022 invasion of Ukraine and the resulting Western sanctions on Russian crude exports, combined with disciplined OPEC+ production restraint, produced the most stressed energy regime since 2008. The Brent–WTI spread widened past $9 as European refiners competed for non-Russian seaborne barrels. The WTI calendar spread sat near −$2 to −$3 for sustained periods, with a low of about −$4 in March 2022, the deepest sustained backwardation on record up to then. The 3-2-1 crack spread spiked above $55 in mid-2022 as European product shortages reverberated globally. On the Stress Monitor's levels, the crack spent 92 sessions at Elevated or worse that year and Brent–WTI 43, though two signals were at Elevated or worse on the same day in only 22 sessions.

The Strategic Petroleum Reserve, commercial crude and Cushing

The Strategic Petroleum Reserve is an emergency stockpile of crude oil owned by the U.S. government and stored in underground salt caverns along the Gulf Coast. It was created after the 1973 oil embargo so the country could keep fuel moving through a serious supply disruption. It holds crude oil, not finished gasoline, and it is measured in millions of barrels.

It affects what you pay indirectly, through crude oil rather than at the pump. Releasing barrels from the reserve adds supply to the crude market and pushes prices down; buying barrels back to refill it does the opposite. The effect is real but modest next to global crude demand, and it reaches the pump only after refining and distribution, with a lag of weeks — which is why the reserve chart and pump prices rarely move in lockstep.

The second line on the chart is commercial crude: every barrel held in the United States outside the reserve, in refinery tanks, storage terminals and pipelines. These are the barrels the market actually draws on week to week, and they are the number oil traders watch — a weekly build or draw in commercial stocks moves crude prices in a way a slow change in the reserve does not. Both are crude oil only; neither counts finished gasoline.

Comparing the two is the point of showing them together. The reserve held more crude than the entire commercial system for most of its history, and the gap has closed and reversed. Reserve barrels are also not interchangeable with commercial ones: a release has to be sold, moved and refined before it reaches a pump, so the reserve line moves in slow policy-driven steps while the commercial line moves with ordinary supply and demand.

The third line is Cushing, Oklahoma — the tank farm where West Texas Intermediate futures are physically delivered, and the most closely watched single storage site in the country. It is a part of the commercial number, not a fourth stockpile: its barrels are already counted there, so the lines on the chart should never be added together. It is also far smaller, running between roughly 12 and 69 million barrels against hundreds of millions for the national figures, which is why the chart puts it on its own scale down the right-hand side. Read it against the right axis only.

Cushing gets that attention because it is the delivery point for the WTI contract. When it fills toward the top of its working capacity, sellers can struggle to find somewhere to physically put oil, and when it drains toward the bottom the opposite squeeze appears — both show up in the WTI price well before they show up at a pump. Working capacity is the volume the tanks can actually hold in normal operation, which is less than their total shell volume: some space is unusable tank bottoms and some is headroom needed to move oil in and out.

That is what the percentage and the lower chart above measure — current stocks against the working capacity of the Cushing tank farm. Read it with one caveat, which is why the figure carries its own date. The capacity number came from a federal report that the EIA has discontinued: the final edition covered March 2024, so 78.4 million barrels is the last officially published capacity for Cushing and there will not be another. Stocks are still current every week, but if the tank farm is expanded or tanks are retired, the denominator will not reflect it. Capacity moved within about two percent between 2018 and 2024, so the figure is a reasonable guide rather than an exact one.

All three levels are reported once a week. The EIA publishes them in the Weekly Petroleum Status Report each Wednesday morning, covering the week that ended the previous Friday. The two national series charted here run back to 1982; the Cushing series begins in 2004, so its line starts partway across the longer windows. The “share of all-time peak” figure compares the current reserve level with its highest recorded fill rather than with any stated capacity, because the authorized capacity has been revised over the years while the historical record has not.

Reserve levels are weekly ending stocks in thousands of barrels as published, shown here in millions.

Glossary of energy futures terms

WTI

West Texas Intermediate. The primary US crude benchmark, light and sweet (low sulfur), with physical delivery at Cushing, Oklahoma. Trades on NYMEX as /CL.

Brent

The global seaborne crude benchmark, light and sweet, delivered at Sullom Voe (Shetlands). Trades on ICE as /BZ.

Cushing

A storage and pipeline hub in Oklahoma where WTI futures are physically delivered. Cushing storage levels are the most-watched US crude inventory metric.

NYMEX

New York Mercantile Exchange, owned by CME Group. Lists WTI, RBOB, heating oil, and natural gas futures.

ICE

Intercontinental Exchange. Lists Brent crude and gasoil futures.

/CL

CME ticker root for WTI crude oil futures, $/bbl.

/BZ

CME ticker root for Brent crude futures, $/bbl.

/NG

CME ticker root for Henry Hub natural gas futures, $/mmbtu.

/RB

CME ticker root for RBOB gasoline futures, $/gallon.

/HO

CME ticker root for heating oil (ULSD) futures, $/gallon.

/MCL, /MNG

Micro WTI and micro natural gas — 1/10th the contract size of /CL and /NG, designed for retail futures traders.

bbl

Barrel. The standard unit for crude oil, equal to 42 US gallons.

mmbtu

Million British thermal units. The energy-content unit used for natural gas pricing.

Gallon (energy context)

US liquid gallon. RBOB and heating oil are quoted per gallon; multiply by 42 to convert to dollars per barrel.

Contango

A futures-curve shape where deferred contracts trade above the front month. Indicates ample supply or weak spot demand. Produces negative roll yield.

Backwardation

The inverse of contango — front month trades above deferred contracts. Indicates spot tightness. Produces positive roll yield.

Term structure

The full set of futures prices across all listed expiries for a given product. Synonym for the forward curve.

Basis

The difference between a cash-market price and the front-month futures price. Reflects local supply, transportation, and quality differentials.

Calendar spread

A trade that buys one expiry and sells another in the same product. Isolates a view on term structure without taking outright price risk.

Crack spread

The price difference between refined products and crude oil, approximating refiner gross margin. The 3-2-1 (3 crude → 2 gasoline + 1 distillate) is the most common; a 5-3-2 variant uses 5 crude → 3 gasoline + 2 distillate.

Roll yield

The gain or loss from selling an expiring contract and buying the next month. Negative in contango, positive in backwardation.

Convenience yield

The implicit benefit of holding the physical commodity — the ability to meet unexpected demand, avoid stockouts, etc. High convenience yield drives backwardation.

Cost of carry

The total cost of holding a physical commodity over a futures period: storage, insurance, financing, less any convenience yield.

Front month / M1

The nearest-expiry actively trading futures contract. Also called the prompt month.

Deferred month / M2, M3

Later expiries beyond the front month. M2 is the second-nearest, M3 the third, etc.

Spot vs futures

Spot is the cash-market price for immediate delivery. Futures are exchange-traded contracts for delivery on a future date.

Open interest

The total number of outstanding futures contracts in a given expiry. A measure of market participation.

Expiry / settlement

The date a futures contract ceases trading. WTI is physically delivered at Cushing; Brent is cash-settled against ICE Brent index.

Physical delivery

The settlement mechanism by which long position-holders receive (and short position-holders deliver) actual barrels of crude. WTI uses physical delivery; most retail traders close before expiry to avoid it.

EIA inventory report

Weekly US crude, gasoline, and distillate inventory data published by the Energy Information Administration, typically released Wednesday at 10:30 AM ET. A key fundamental data point for short-term oil moves.

Henry Hub

A natural gas distribution hub in Erath, Louisiana. The delivery point for /NG futures and the reference for US natural gas pricing.

RBOB

Reformulated Blendstock for Oxygenate Blending. The gasoline blendstock that is the basis for /RB futures.

ULSD

Ultra-Low Sulfur Diesel. The modern specification for heating oil and on-road diesel; what /HO futures track.

Distillate

Middle-distillate refined products: heating oil, diesel, jet fuel. Heavier than gasoline, lighter than residual fuel oil.

Light-sweet

Crude with low density (high API gravity) and low sulfur content. Easier and cheaper to refine into gasoline and distillates. WTI and Brent are both light-sweet.

Heavy-sour

Crude with high density and high sulfur content. Trades at a discount to light-sweet because it is more expensive to refine and produces lower yields of high-value products.

Refiner crack margin

The economic margin a refinery earns from converting crude into refined products. The 3-2-1 crack spread is the most common public proxy.

Frequently asked questions

What is contango in oil futures?

Contango is when later-dated futures trade above the front-month price. It usually signals weak spot demand or surplus inventory and creates negative roll yield for passive long ETFs like USO, because each monthly roll sells the cheaper expiring contract and buys the more expensive next month.

What is backwardation in oil markets?

Backwardation is when the front-month futures price exceeds later-dated contracts. It signals spot tightness — typically from refinery outages, geopolitical disruption, or strong physical demand — and produces positive roll yield for long futures positions.

How is the 3-2-1 crack spread calculated?

((2 × RBOB × 42) + (HO × 42) − 3 × WTI) / 3, expressed in dollars per barrel. It approximates a refiner's gross margin from cracking three barrels of crude into two barrels of gasoline and one barrel of distillate.

What does the Brent–WTI spread tell you?

It measures the price gap between seaborne (Brent) and US-landlocked (WTI) crude. A $2–$5 spread is normal; widening above $7–$8 typically signals either a US pipeline bottleneck at Cushing or a non-US geopolitical risk premium driving Brent higher.

What are the six energy futures stress signals on this page?

Brent–WTI spread, WTI calendar (M2−M1) backwardation, natural gas calendar dislocation, 3-2-1 crack spread, WTI 1-day percent change, and gold 1-day percent change. Three or more flashing simultaneously is treated as confirmed stress.

When does the WTI futures market typically backwardate?

When physical spot demand exceeds available delivery supply at Cushing — common during refinery turnarounds, OPEC+ supply cuts, hurricane disruption, or geopolitical shocks like the 2022 Russia sanctions period.

Why does natural gas have different calendar-spread behavior than oil?

Natural gas storage is highly seasonal. April–October typically shows positive contango as inventories build for winter, while November–February can flip negative on cold-snap forecasts. Oil does not have the same withdrawal-season structure.

What is roll yield and why does it matter for USO and UNG?

Roll yield is the gain or loss from selling an expiring futures contract and buying the next month. Contango produces negative roll (sell low, buy high); backwardation produces positive roll. Passive long ETFs like USO and UNG carry this exposure mechanically and can decay materially during extended contango regimes.

What is a calendar spread trade?

Buying one expiry and selling another in the same product. It isolates a view on term structure — whether the curve will steepen or flatten — without taking outright directional price risk.

What units do energy futures use?

Crude oil (WTI, Brent) is dollars per barrel; refined products (RBOB gasoline, heating oil) are dollars per gallon, and there are 42 gallons in a barrel; natural gas is dollars per million British thermal units (mmbtu).

Can WTI go negative again?

April 20, 2020 was driven by Cushing storage saturation plus contract-expiry mechanics. CME has since adjusted margin and limit rules. The same magnitude is unlikely under current rules, but extreme contango episodes remain possible whenever physical storage approaches capacity.

What's the difference between front-month and deferred-month contracts?

Front-month (M1) is the nearest-expiry actively trading contract; deferred months (M2, M3, etc.) are later expiries. M2 minus M1 is the most-watched calendar spread for term-structure analysis because it cleanly isolates near-term carry.