On January 1 a risk manager observes that the one-year continuously compounded

On January 1 a risk manager observes that the one-year continuously compounded interest rate is 5% and storage costs of a commodity product A is USD 0.05
per quarter (payable at each quarter end). He further observes the following forward prices for product A: March 5.35; June 5.90; September5.30;
December 5.22. Given the following explanation of supply and demand for this product how would you best describe its forward price curve from June to
December?

A. Backwardation as the supply of product A is expected to decline after summer

B. Contango as the supply of product A is expected to decline after summer

C. Contango as there is excess demand for product A in early summer

D. Backwardation as there is excess demand for product A in early summer