Status: Yellow – Caution: The forward curve shows mild contango, indicating potential uncertainties.
This indicator tracks the pricing of wholesale electricity contracts for delivery 12–60 months into the future. It reflects market expectations for supply-demand balance and future fuel costs.
Why it matters
Forward prices influence hedging strategies for energy buyers and sellers. A steep backwardation or contango can signal future tightness or oversupply. The curve also serves as a benchmark for long-term contracting and asset valuation.
Interpreting signals
- Green: Forward curve is stable or gently backwardated, suggesting ample supply and manageable risk.
- Yellow: Curve is flattening or shows mild contango, indicating potential uncertainties.
- Red: Sharp contango or backwardation spikes, signalling market stress, scarcity, or major shifts in fundamentals.
Sources
Data is compiled from major electricity ISO/RTO forward market reports and broker quotations.
