Oil Futures Rollover
Rolling means closing a futures position in the contract that is about to expire and opening the same position in a later month. Because the two contracts trade at different prices, continuous charts show a jump on the roll date, and long-term holders gain or lose money depending on the shape of the futures curve.
Why oil futures have to be rolled
Every oil futures contract has a delivery month and a last trading day. WTI (CL) is physically delivered at Cushing, Oklahoma, and Brent is cash-settled against the ICE Brent Index. A trader who wants to keep exposure to oil, rather than take delivery or be closed out, must move the position to the next contract before expiry. Fund managers, ETFs, CFD brokers and hedgers all do this every month. Exact dates are in the oil futures expiry calendar.
A roll is two trades done together: sell the near month and buy the next month (for a long position). Exchanges list calendar spreads so traders can do both legs in one order at a fixed price difference, which reduces execution risk.
Why continuous charts gap
A "continuous" chart, such as the front-month quotes on our oil price chart, strings together different contracts. On the day the data provider switches from the expiring month to the next one, the chart jumps by the price difference between them, even though no trader made or lost that money.
Charting platforms handle this in different ways:
- Unadjusted (spliced): shows actual traded prices but leaves gaps at each roll. Best for seeing the real price on a given day.
- Back-adjusted: shifts past prices by the roll gap so the series is smooth. Better for measuring trends and returns, but historical levels no longer match what was actually traded.
- Roll timing: some providers roll on expiry, others a set number of days earlier or when volume shifts to the next month. Two charts can therefore show different prices for "WTI" on the same day.
| Curve shape | Expiring month | Next month | Roll gap | Effect for a long holder |
|---|---|---|---|---|
| Contango | $80.00 | $80.80 | +$0.80 | Sells low, buys higher: a roll cost of 1% per month |
| Flat | $80.00 | $80.00 | $0.00 | No roll effect |
| Backwardation | $80.00 | $78.40 | −$1.60 | Sells high, buys lower: a roll gain of 2% per month |
Hypothetical numbers for illustration only, not market data.
The cost of rolling in contango
In contango, later contracts cost more than nearer ones, usually because inventories are high and storage has to be paid for. A long investor who rolls every month keeps selling the cheaper expiring contract and buying the dearer next one. If spot prices do not rise to meet the futures curve, the position loses value each month even when the spot price is unchanged. This is called negative roll yield.
In backwardation, later contracts are cheaper, typically when inventories are tight. Rolling then works in the long holder's favour: positive roll yield. Supply shocks, such as the 2026 disruption to flows through the Strait of Hormuz, tend to push the curve into backwardation as near-term barrels become scarce. The full mechanism is explained in contango vs backwardation.
Roll yield compounds. A 1% monthly roll cost is roughly 11–12% a year. That is why long-term returns from rolling oil futures can be very different from the change in the spot price.
How oil ETFs roll
Futures-based ETFs publish their roll method in their prospectus:
- USO (United States Oil Fund) tracks WTI. Its benchmark is the near-month NYMEX contract, rolled into the next month over five days at the start of each month, according to the fund's issuer, USCF. It may also hold other months and other exchanges' contracts.
- BNO (United States Brent Oil Fund) tracks the near-month ICE Brent contract, switching to the next month when the near month is within two weeks of expiry.
Because ETF rolls are scheduled and public, other traders can anticipate them. Large funds also spread their rolls over several days to reduce the market impact. The April 2020 episode, when the May WTI contract settled at −$37.63 on its second-to-last day, led USO to move part of its holdings into later months. See oil ETFs explained for more on how ETF returns differ from the oil price.
How CFD providers handle the roll
Oil CFDs are priced from futures. Brokers handle expiry in one of two ways:
- Dated CFDs follow a specific futures month and expire with it. The broker either closes the position at expiry or offers to roll it into the next month, usually charging the spread on both legs.
- Undated or "cash" CFDs roll automatically. The broker makes a price adjustment to the position on the roll date so that the gap between the two contracts does not appear as profit or loss, then charges or credits financing daily.
Read your broker's roll policy: the adjustment date, whether a spread is charged and how financing works. More detail is on our oil CFDs page.
Practical points for futures traders
- Roll before liquidity leaves. Volume shifts to the next month several days before expiry. Waiting until the last day can mean wider spreads.
- Watch the spread, not just the outright. The cost of the roll is the calendar spread, which can move sharply during supply shocks.
- Brent and WTI roll at different times. WTI expires around the 20th of the month, Brent at month-end. See oil trading hours for settlement windows that decide roll prices.
- Use a futures calculator to see what a given spread means per contract: at 1,000 barrels, each $0.10 of spread is $100.
Futures, ETFs and CFDs involve a high risk of loss, and roll costs can erode returns even when the oil price rises. This page is educational and not investment advice.
Oil futures rollover FAQ
What is rollover in oil futures?
Rollover is moving a futures position from a contract that is about to expire to a later contract month. A long trader sells the expiring contract and buys the next one, usually at the same time through a calendar spread order. The price difference between the two months decides the roll cost or gain.
Why did my oil chart jump overnight?
Most likely the chart switched from the expiring futures contract to the next month. Continuous charts splice contracts together, so the jump equals the price difference between the two months, not an actual market move. Back-adjusted charts remove this gap by shifting past prices.
Does rolling cost money?
It depends on the curve. In contango, later months are more expensive, so a long position loses a little at each roll. In backwardation, later months are cheaper and rolling adds to returns. Commissions and bid-ask spreads on both legs are an extra cost either way.
When do oil ETFs roll their futures?
USO's benchmark rolls from the near-month WTI contract to the next month over five days at the start of each month. BNO switches to the next Brent contract when the near month is within two weeks of expiry. Both funds publish their methods in their prospectuses.
Related pages
Oil Futures Expiry Calendar
Expiry dates for Brent and WTI crude oil futures in 2026 and 2027, how each last trading day is calculated, and when quote services roll.
Contango & Backwardation
Contango and backwardation in crude oil explained with examples: what the futures curve says about supply, storage economics and ETF roll costs.
Oil ETFs
How oil ETFs work: USO, BNO and others, futures-based structure, roll yield, why ETF returns differ from the oil price and when they suit investors.
Oil CFDs
How oil CFDs work: pricing from futures, spreads, overnight financing, leverage and margin calls, plus regulatory risk warnings by region.