uhhhhmmmm... so i should invest in supertankers 'cuz the traders don't want oil to remain so low? i don't exactly have the words after reading this article and the past few about the same subject... the only words i have start with "f" and end with "u."
and Oil Traders Seek Another 10 Supertankers for Storage (Update3)
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By Alaric Nightingale
Jan. 7 (Bloomberg) -- Oil traders are seeking as many as 10 supertankers to store crude, potentially taking the amount hoarded at sea to almost five days of European Union demand, according to
Frontline Ltd., the largest owner of the vessels.
About 25 of the carriers, each able to hold about 2 million barrels of crude, were already hired for storage. There are enquiries for 5 to 10 more,
Jens Martin Jensen, Singapore-based interim chief executive officer of the company’s management unit, said by phone today. Traders are storing crude to take advantage of higher prices for supply in the future.
Thirty-five supertankers represent about 7 percent of the global fleet of very large crude carriers, according to data from London-based Drewry Shipping Consultants Ltd. Storing oil in tankers may buoy
rental rates that fell by a record 78 percent last year as slower economic growth sapped demand for energy.
“I’ve never before seen storage demand on this scale,” said
Didier Labat, a Paris-based shipbroker at Barry Rogliano Salles who has worked in tanker markets for about 20 years.
Commodities prices fell the most in
five decades last year, with crude dropping more than $100 from the peak of $147.27 a barrel in July, as simultaneous recessions hit the U.S., Europe and Japan. Oil demand in 2008 fell for the first time since 1983, according to the Paris-based International Energy Agency.
Traders are seeking to lease ships for three to nine months, Jensen said. Crude oil for December delivery traded at $61.90 a barrel as of 10:49 a.m. in London, $13.66 more than the February contract. Oil companies and traders may be able to profit from storing the oil, assuming shipping, insurance and financing costs are covered.
Supertanker Rates
A supertanker would cost about 90 cents a barrel a month for storage depending on the length of the rental, according to data last month from shipbroker Galbraith’s Ltd.
Iran, the second-largest member of the Organization of Petroleum Exporting Countries after Saudi Arabia, idled as many as 15 of its biggest ships in May to store crude oil. That contributed to three consecutive months of higher rental rates for ships.
The cost of delivering Middle East oil to Asia, the world’s busiest route for supertankers, rose yesterday for the first time since Dec. 5, according to the Baltic Exchange in London.
Forward freight agreements advanced. The derivatives are used by traders to bet on the future price of hauling Saudi Arabian cargoes to Japan, an industry benchmark.
The contracts traded at about 46 Worldscale points for the fourth quarter, according to prices from Oslo-based broker Imarex ASA as of 10:34 a.m. London time. They closed at 45 yesterday.
Tanker Index Gains
Worldscale points are a percentage of a nominal rate for more than 320,000 specific routes. They give owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
Frontline, based in Bermuda, has advanced 13 percent in Oslo trading this year. The five-member
Bloomberg Tanker Index has gained 12 percent.
EU oil consumption averaged 14.86 million barrels a day in 2007, according to data from BP Plc.
To contact the reporter on this story:
Alaric Nightingale in London at
Anightingal1@bloomberg.net
I was afraid of my gas being 85% ethanol and I didn't know the levels of ethanol in the gas, but it's alright. As it turned out almost all the gas stations in Md. are 10% ethanol due to Governors orders. I made a mistake in freaking out about ethanol rates for I remembered my station had an ethanol sticker on it's pumps. I like all the advice I read on this site but I broke a cardinal rule, If it ain't broke, Don't fix it. :embarrest: No problem here. This place is feeling more like a good home all the time.
