Backwardation
When oil for delivery soon costs more than oil for delivery later, so the futures curve slopes down. It signals a shortage now: buyers pay extra to get barrels today, and nobody wants to store oil. The opposite, when later delivery costs more (to cover storage), is called contango.
Example
On 26 October 2026 the nearest Brent contract cost about $5 a barrel more than the next one, up from $3.69 a week earlier, even as the Brent price fell.
Explained in