Where's the price floor? Check the contango

New York

OIL traders searching frantically for an end to the deepest price rout since the 2008 financial crisis should forget about Opec policy, US drilling rigs or interest rates. At least for the moment.

Instead, according to some physical traders and analysts, they should be scouring their screens for what is likely to be the best leading indicator of a price floor: a deep contango, a market in which immediate delivery prices are cheaper - much cheaper - than futures in the months ahead.

When the discounts …