The honest answer to "is crude oil in contango or backwardation right now?" is that nobody can tell you in an article — the curve can flip within a single session on an inventory print, an OPEC+ headline, or a refinery outage. What an article can do is teach you to answer it yourself in under a minute, every time, using the same WTI and Brent futures quotes you'll find on the crude oil pages of commodity-hub.eu.
This is a mechanical process. Pull the futures strip, subtract two numbers, check the sign, then look at the shape further out the curve. Below is the method traders actually use, plus what each shape tells you about physical inventories and about the roll yield you'll earn or bleed if you hold a long position.
Open the WTI (NYMEX, ticker CL) or Brent (ICE, ticker B/BZ) futures strip and list the settlement prices for consecutive monthly contracts. Then run three comparisons:
If all three spreads are positive, crude is cleanly backwardated. If all three are negative, it's in contango. Mixed signs mean a mixed or humped curve, which is more common than most commentary admits and carries its own information (more on that below).
For the full definitional treatment of the two states, see the contango vs backwardation glossary entry. The rest of this piece assumes you know the definitions and want the diagnostic workflow.
Step 1 — Use settlements, not last trade. Deferred crude contracts trade thinly. A stale last-trade print in the 12th month will manufacture a spread that doesn't exist. Settlement prices are the exchange's official marks and are the correct input for curve work.
Step 2 — Watch the expiry trap. WTI's front month goes off the board around the third business day before the 25th of the month prior to delivery. In the final week, the prompt spread can behave erratically as positions roll. If you're within a few days of expiry, treat M2−M3 as your "real" prompt spread and note that M1 is a rolling artifact.
Step 3 — Convert to a percentage. A $1.00 contango on $70 crude is not the same as $1.00 on $110 crude. Divide the spread by the front-month price and annualise if you're comparing across time. A monthly contango of 0.5% is roughly 6% annualised drag before financing.
Step 4 — Compare WTI to Brent. WTI is landlocked and priced at Cushing, Oklahoma; Brent is waterborne and reflects the seaborne market. WTI can slip into contango on a local Cushing storage build while Brent stays backwardated, or vice versa. Divergence between the two curves is a regional signal, not a global one. Both crude benchmarks are tracked on commodity-hub.eu, so you can line the two strips up side by side.
Step 5 — Check refined products. Gasoline (RBOB) and heating oil/diesel curves often lead crude. If distillate is screaming backwardation while crude is flat, the tightness is in refining and crack spreads, not in the barrel itself.
Curve shape is, at heart, a price for storage.
Contango means deferred barrels are worth more than prompt barrels. That pays someone to buy crude today, store it, and sell it forward. It is the market bidding for storage capacity — the classic signature of oversupply and rising inventories. When the contango is steep enough to cover tank rental, insurance, and financing, it's called a cash-and-carry and floating storage becomes economic. Extremely steep contango historically appears when storage is approaching physical capacity and holders will accept almost any price to move a barrel out the door.
Backwardation means prompt barrels are worth more than deferred. Buyers are paying a premium for immediate delivery — the convenience yield exceeds the cost of carry. This is the signature of tight physical balances: low commercial stocks, supply disruptions, strong refinery runs, or OPEC+ withholding barrels. In backwardation there is no incentive to store; inventories tend to be drawn down.
Humped curves — backwardated at the front and contangoed further out, or the reverse — usually mean a temporary disruption sitting on top of a different medium-term view. A front-end squeeze from a pipeline outage with a comfortable 2026 balance produces exactly this shape.
Cross-check whatever the curve tells you against the weekly EIA petroleum status report and Cushing stock levels. If the curve says tight and inventories are building, one of the two is about to move.
If you hold long crude exposure through futures or a commodity ETF, you never take delivery — you sell the expiring contract and buy the next one. The difference is roll yield.
To estimate the drag: take your M1−M2 spread as a percentage of price and multiply by twelve for a rough annual figure. Compare that number against your expected directional return. If the annualised contango exceeds what you think spot will do, the futures trade is fighting a headwind before it starts.
The same logic applies across every futures market on commodity-hub.eu — natural gas curves are dominated by seasonality, grain curves by the harvest calendar — but crude is where roll yield gets discussed most because of the size of the ETF complex tracking it.
A workable routine: each morning, record M1, M2, M6 and M12 settlements for both WTI and Brent. Track the M1−M6 spread over time in a simple series. What matters for trading is rarely the level — it's the direction of change. A backwardation that has narrowed for three straight weeks is telling you the physical market is loosening well before the curve actually flips into contango. Conversely, a contango that keeps flattening is the early sign of a tightening balance.
Also note why the curve is moving. Contango that appears because deferred prices are rising (demand optimism) is a very different market from contango caused by the front month collapsing (a prompt glut). Same sign, opposite story.
How do I check right now whether crude oil is in contango or backwardation?
Pull the WTI or Brent futures strip on commodity-hub.eu, take the front-month settlement price and subtract the sixth-month settlement. A positive result means backwardation; a negative result means contango. Repeat with the twelfth month to confirm the shape holds along the whole curve rather than just at the front.
Can WTI be in contango while Brent is in backwardation?
Yes, and it happens regularly. WTI settles against physical delivery at Cushing, Oklahoma, so it reflects US inland storage and pipeline conditions. Brent reflects the waterborne North Sea market and global seaborne flows. A Cushing inventory build can push WTI's front spreads into contango while Brent stays backwardated on tight international supply.
Does contango always mean oil prices will fall?
No. Contango describes the relationship between prompt and deferred contracts, not the future direction of spot prices. It signals ample near-term supply and a market willing to pay for storage. Prices can rise while the curve stays in contango — but a long futures position will still lose roll yield on every roll, which is a separate cost from any directional move.
What is a normal size for the crude oil prompt spread?
There is no fixed normal — it depends on the price level, storage economics and financing costs. The practical approach is to express the spread as a percentage of the front-month price and compare it to its own recent range, rather than judging the dollar figure in isolation. A widening trend matters more than any single reading.