A thorough analysis of commodities markets requires an in-depth examination of a raw material's market structure. In the crude oil market, term structure is one facet of the overall picture when it comes to the supply and demand fundamentals. Term structure is the difference between the price of the energy commodity for nearby and deferred delivery periods. When nearby prices exceed deferred prices, the condition of backwardation is a sign of tight supply conditions. Contango or the state where nearby prices are lower than deferred prices signals a market that has either a supply and