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World’s Largest Traders Use Offshore Supertankers to Store Oil (WSJ)
Posted on 1/19/15 at 2:47 pm
Posted on 1/19/15 at 2:47 pm
"The supertanker TI Oceania was built to ferry vast quantities of oil across oceans, but for the next year it is expected to remain anchored off the coast of Singapore, storing millions of barrels of oil for Vitol SA, a giant trading house."
"The oversupply has given rise to a so-called contango in the market, when the current price of a commodity is lower than prices for delivery in the future. That makes it attractive for buyers to purchase oil now at the cheaper rates, store it and strike sales agreements at a higher price in the future, locking in profits".
Wonder how much rent do the owners of the vessel charge for storing the booty?? Does this stuff have any material affect on the price of oil (taking it off the table and thereby helping their own cause)??
LINK
"The oversupply has given rise to a so-called contango in the market, when the current price of a commodity is lower than prices for delivery in the future. That makes it attractive for buyers to purchase oil now at the cheaper rates, store it and strike sales agreements at a higher price in the future, locking in profits".
Wonder how much rent do the owners of the vessel charge for storing the booty?? Does this stuff have any material affect on the price of oil (taking it off the table and thereby helping their own cause)??
LINK
5
Posted on 1/19/15 at 2:59 pm to tigerpawl
I have a supertanker stored off Fourchon myself right now, gonna cash in in a couple years
Posted on 1/19/15 at 3:27 pm to Cosmo
quote:
I have a supertanker stored off Fourchon myself right now, gonna cash in in a couple years
You only have one ? You are no baller sir.
Posted on 1/19/15 at 4:13 pm to Cosmo
quote:
I have a supertanker stored off Fourchon myself right now, gonna cash in in a couple years
My boat only holds 60 gals.
Posted on 1/19/15 at 4:38 pm to SG_Geaux
quote:
You only have one ? You are no baller sir.
I had one full of oil, but I dump that junk and filled it full of nuru massage oil. I find that to be a much better personal investment. The payoff is magnificent.
Posted on 1/19/15 at 7:07 pm to tigerpawl
These guys had it figured out
Posted on 1/19/15 at 11:01 pm to Cosmo
I've been burying barrels of sweet crude in my backyard for the past month.
Posted on 1/20/15 at 12:21 am to tigerpawl
A lot of profits evaporating in those tankers.
Posted on 1/20/15 at 10:04 am to tigerpawl
I guess I don't understand how manning and renting a supertanker is economically viable? I'm assuming it's not refined yet, or it would have a shelf life?
It just sounds dumb to me, but I'm not a CEO of a billion dollar company.
It just sounds dumb to me, but I'm not a CEO of a billion dollar company.
Posted on 1/20/15 at 10:33 am to Jcorye1
quote:
I guess I don't understand how manning and renting a supertanker is economically viable?
Money made on oil sale minus cost of renting supertanker divided by length of contract.
Posted on 1/20/15 at 10:40 am to Jcorye1
I'm not an expert, but they are effectively cold stacking the tanker, which massively reduces costs. They just have to pay the tanker owner enough above cold stack costs to invent them to take it out of commission.
Posted on 1/20/15 at 10:46 am to TheHiddenFlask
Plus the tanker operator is making money while burning no energy to drive it back and fourth across the ocean.
The only thing I don't get is the size and scope of the idea. Yeah, that seems like a lot of oil, but in world oil reserves it seems like spit in a swimming pool.
The only thing I don't get is the size and scope of the idea. Yeah, that seems like a lot of oil, but in world oil reserves it seems like spit in a swimming pool.
Posted on 1/20/15 at 10:53 am to Clyde Tipton
In the scope of things, it is. But let's say, for simplicity sake, that the hold the futures contract for $60/bl for 10,000,000 one year from now. They bought 10,000,000 at $40/bl. So, in a year, they are delivering 10,000,000 barrels for 60,000,000. Let's say, it cost them $5,000,000 to store for a year. They've just profited 15mm on 40mm. I'm not sure what the actual storage cots are, hut I think this is general premise.
This post was edited on 1/20/15 at 10:55 am
Posted on 1/25/15 at 7:26 pm to tigerpawl
It looks like these floating storage tankers are starting to see a lot more action.
LINK
Anyone have thoughts on oil shipping stocks like Nordic American Tankers Limited (NYSE:NAT), Frontline Ltd. (NYSE:FRO) and Teekay Corporation (NYSE:TK?
If prices continue to drop, the demand for these tankers will only increase. Also, how will exports and imports be affected with the low oil prices? Will this increase the demand of the shipping services?
LINK
Anyone have thoughts on oil shipping stocks like Nordic American Tankers Limited (NYSE:NAT), Frontline Ltd. (NYSE:FRO) and Teekay Corporation (NYSE:TK?
If prices continue to drop, the demand for these tankers will only increase. Also, how will exports and imports be affected with the low oil prices? Will this increase the demand of the shipping services?
Posted on 1/25/15 at 7:30 pm to southernelite
I don't think a year is long enough to store but if more companies take this strategy it could help stabilize prices. Price down below $45 this weekend.
This is a great shot in the arm to global economies. I think China and the rest of Southeast Asia start booming for the next few years.
This is a great shot in the arm to global economies. I think China and the rest of Southeast Asia start booming for the next few years.
Posted on 1/26/15 at 7:13 pm to southernelite
quote:
In the scope of things, it is. But let's say, for simplicity sake, that the hold the futures contract for $60/bl for 10,000,000 one year from now. They bought 10,000,000 at $40/bl. So, in a year, they are delivering 10,000,000 barrels for 60,000,000. Let's say, it cost them $5,000,000 to store for a year. They've just profited 15mm on 40mm. I'm not sure what the actual storage cots are, hut I think this is general premise.
I think your math is wrong. You missed a zero.
10,000,000 x $40 = $400,000,000
10,000,000 x $60 = $600,000,000
So you net a cool $200,000,000
Jesus!
Note: that boat holds 3.16mm bbl so adjust accordingly.
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