The explanation of this vast subject has been cut into three e-papers. One will cover the linkage between spot and futures prices (Part 1), one will cover the effect of the forward curve on physical markets (Part 2) and the last e-paper will cover the effect of crack spreads on market players (Part 3).
This e-paper focuses on links between spot and futures prices. We will start our investigation by determining what links are present and how this drives fundamentals. We will look at some examples which highlight the interplay between futures and physical markets.
Based on this analysis we will discuss what a trader should monitor in order to get a broad view of the market structure and what is needed to be successful.