I am pretty new to energy so wanted to clarify some basics with elementary questions:
The terms contango and backwardation simply mean a commodity trading at a premium or discount to the future rather than serving as a forecast for that commodity’s future pricing. Is that correct?
For natural gas, I know storage is a shock absorber but does it also influence prices? For example, storage being abundant that prices respond bearishly.
I know these are basic questions but I find them to be important enough to clarify so any help would be appreciated.