backwardation

American  

[bak-wer-dey-shuhn] / ˌbæk wərˈdeɪ ʃən /

noun

1. (on the London stock exchange) the fee paid by a seller of securities to the buyer for the privilege of deferring delivery of purchased securities.

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backwardation British  

/ ˌbækwəˈdeɪʃən /

noun

1. the difference between the spot price for a commodity, including rent and interest, and the forward price

2. (formerly, on the Stock Exchange) postponement of delivery by a seller of securities until the next settlement period

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Etymology

Origin of backwardation

First recorded in 1840–50; backward + -ation

Compare meaning

How does backwardation compare to similar and commonly confused words? Explore the most common comparisons:

• contango vs. backwardation

Example Sentences

See Examples For:

backwardation

“The curve structure also strengthened, with the front end returning to backwardation after recently flipping into contango amid the ramp-up of Persian Gulf supply.”

From The Wall Street Journal ● Jul. 8, 2026

At the same time, the current backwardation in the gas market—when front-month prices trade above winter contracts—is providing little economic incentive for traders and utilities to inject additional gas into storage ahead of winter.

From The Wall Street Journal ● Jun. 2, 2026

Lacalle expects prices will end the year lower than at present, citing the huge backwardation of crude futures, which suggest prices will be lower going forward.

From MarketWatch ● May 1, 2026

Slok pointed out that the Brent forward curve — the relationship between current prices of a futures contract and prices for contracts at later delivery dates — is in steep backwardation.

From MarketWatch ● Apr. 22, 2026

However, near-term supply remains tight, analysts said, with immediate oil prices trading above later-dated contracts—a market structure known as backwardation.

From The Wall Street Journal ● Jan. 21, 2026