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How a confluence of external factors led to disappointing oil futures : The Indicator from Planet Money Oil prices are on the rise, but futures markets see them lower than where they are now. This is known as backwardation. Today, we learn what's behind this phenomenon.

The Indicator from Planet Money

Backwardation in the oil market

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Paddy Hirsch

, 

Backwardation in the oil market

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(Photo by Spencer Platt/Getty Images) Spencer Platt/Getty Images hide caption

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Spencer Platt/Getty Images

(Photo by Spencer Platt/Getty Images)

Spencer Platt/Getty Images

Oil markets have had a turbulent ride over the past few years. Back in the spring of 2020, the price of a barrel of oil notoriously entered negative territory as overall demand sharply declined because of the pandemic. Now, demand is bouncing back and causing prices to rise to almost $100 a barrel. But prices in the futures market are not looking so good, aka backwardation. Suppliers are struggling to catch up and eyeing the market for clues on what to do in the months ahead.

Today, we learn about backwardation in the oil market. What it is, what's causing it, and how oil suppliers are reacting in this movement.

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