Contango and backwardation
When the futures curve slopes upward, holding a long position means repeatedly selling a cheaper expiring contract and buying a more expensive one — a persistent drag. When it slopes downward, the same mechanic pays you. The direction of the curve is a return stream in its own right.
Why it is well suited to automation
The curve is observable, roll dates are known in advance, and the decision rule is arithmetic rather than predictive. A scheduler can manage the entire lifecycle. This is among the most cleanly mechanisable strategies in any market.
The catch worth stating
Curve shape is not static and inverts around exactly the events that also move price violently. A strategy that harvests backwardation in energy is short a supply shock whether or not it intends to be, and the roll yield collected over a quiet year can be lost in a fortnight.