What does Forwardation mean?
A pricing situation in the futures market in which the spot price is lower than the futures price. The futures price of a commodity or currency is above the spot price for immediate delivery.
Futures Knowledge Explains Forwardation
In a forwardation situation forward prices exceed spot prices, so the forward curve is upward sloping. For example, if the spot price of oil is $65 and the futures price is $70 than the market is considered to be in forwardation. Backwardation is opposite of forwardation.