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Storage cost

What it costs to keep a physical commodity until it is sold or delivered.

How to read the number

Storage explains the shape of the futures curve: the dearer it is to hold the goods, the higher distant contracts stand above near ones.

When the metric lies

Storage capacity is finite. When tanks fill up the cost jumps, and near contracts collapse relative to distant ones, in extreme cases all the way through zero.

Also known as: cost of storage

Related terms