Investors storing oil on tankers and land. Reason?

[wulimaster]

I noticed that oil tankers are sitting parked full of oil and that oil storage facilities are filling up. The official speculation is that the investors are betting on things turning around and them making a killing. I don't think the economy will turn around for a very long time and since investors usually are not in it for the long term gains I believe that must not be the real reason. I believe it could be in advance of action soon to be taken against Iran. Then their oil investment will pay off big time.

Anyone else agree or disagree?

 

[Steve S]

I heard that on the radio the other day People will buy all the $4.00 per gallon they can afford. As soon as the gas prices dropped big p/u and cars started selling. Consumers have short memories to complain about not to do something about. From a busisness sense I would rather make profit selling a 100 gallons of $4.00 per gallon of gas than 400 gallons of $1.00 per gallon gas.

 

[Steve S]

I am not sure of the motive ,speculating or something happening. Either way if you look at what is happening we are in big doo doo.

 

[digitalSniperX1]

Those tankers are full of Amsoil and are sold under contract with Penn DOT as they need lots of the stuff to build new roads.

Seems someone's gonna be way up in a down market.

 

[oilyriser]

Maybe it has to do with the 30% drop in new car sales.

 

[CentralNY1]

Those tankers aren't cheap. They charge between $25,000 and $75,000 per day so if they are being used for storage they can only wait so long to find a buyer for their crude. Due to all of this we will see a run-up to about $50/barrel for the April crude contract but when all of this oil begins to flood the market look for the May contracts to dip right back down to the high 30's/low 40's. Translation: Gasoline prices will not go above $2.60 per gallon for quite some time. Also, OPEC is becoming irrevelant in the whole oil equation but that is a whole different topic.

 

[labman]

There was an AP story in our paper yesterday about the glut of crude. Gasoline consumption has continued to go down. I am not sure how it works cutting back production of an oil field. The oil has to go somewhere, and most of the onshore storage is full.

So maybe this is a good time to take down Iran.

 

[LTVibe]

Originally Posted By: labman
There was an AP story in our paper yesterday about the glut of crude. Gasoline consumption has continued to go down. I am not sure how it works cutting back production of an oil field. The oil has to go somewhere, and most of the onshore storage is full.

That's what I've been reading also:

As demand declines, oil tankers lower anchors


Quote:
As demand for crude has plummeted, the world suddenly finds itself awash in oil that has nowhere to go.

 

[PandaBear]

Speculation about OPEC production cuts and the following rise in prices, compare to today's low prices, means that it makes money to just store the crude for future sales.

$25k to $75k a day is nothing compare to how much crude can be stored and the volatility of the crude price.