yitbos
Posted on 01/15/2009 9:40:19 PM PST by TigerLikesRooster
January 16, 2009
Morgan Stanley to secure supertanker to store crude oil
Leo Lewis, Asia Business Correspondent
Shipping brokers in Tokyo say that Morgan Stanley has joined a growing international scramble to secure an oil supertanker and use it to store millions of barrels of crude in what commodity dealers believe may be the “trade of the year”.
The rush to snap-up supertankers and profit from the huge “contango” spreads between the falling crude spot price and rising futures price comes amid dire warnings by analysts over the future of the wider shipping industry.
Massive overcapacity and slumping global trade are expected to trigger a second collapse in cargo rates, which already plunged nearly 94 per cent last year. Exports from China, Taiwan, Korea and Japan are falling fast and expected to drop further at a pace not seen since the early 1980s.
Sources throughout the Asian shipping sector say that despite a recent rally in container and dry bulk rates, 2009 could see dozens of firms going bust. A spokesman for Japan’s largest shipping line, Nippon Yusen, predicted prolonged difficulties for cargo rates as the global economy falters.
(Excerpt) Read more at business.timesonline.co.uk ...
Ping!
I want the franchise for spraying liquid bedliner into the containers of the container ships. Maybe that’s the next place to store it, now that we’re not buying as many poisoned toys and one-use electric tools from China any more.
they must think oil will go up significantly.
“Frontline, which owns the world’s largest fleet of supertankers, said yesterday that around 80 million barrels of crude are currently sitting in storage in the hulls of various ships around the world.”
That’s about a day’s worth of oil, correct?
Another cattle call for a bubble.
Just what we need. Morgan Stanley wants to do their part to drive up oil prices again. Didn’t they get some bailout money? We would have been better off, if they had just gone under.
This is going to end badly for those storing crude, imo.
Crude will continue falling and will be in the $25 range before too long. And then many of those holding these vast amounts of oil in storage will finally capitulate for some reason (margin calls on other investments, more deflationary data/demand destruction) and panic sell driving the price lower and lower.
$15/bbl crude by April or sooner.
Of course, the massive hyperinfation heading our way within a few years might make these gambits hugely successful long-term.
As we saw last month, the price of oil drops abruptly when it nears the end of the trading month. The speculators keep betting that the price is going to turn around, but when it comes time to fish or cut bait, they have to bail on their contracts. Look for another spike when March becomes the front month on the futures trading, followed by a similar cycle.
There are supposed to be about a hunnert of these floating spot markets anchored or driving around in circles.
yitbos
and they just came out with report saying oil was going to 25 a barrel! what a joke
yitbos
MS
yitbos
What could go wrong with that?
Do they have any idea what $2M worth of oil even looks like?
This is going to be funny, I don't care who you are.
/johnny
They want to own oil when it invariably goes up in price. There is nothing sinister about this, and assuming their predictions are correct it is good for the economy, since it smooths out the price by raising it slightly now and lowering it in the future when this supply is sold.
I have no idea how much it costs to store it for a year, but they could buy it today for $35/brl and buy futures guaranteeing they’ll get $50/brl for it in May (or $59/brl next January). Could be a good investment if there’s lots of unused tanker capacity that can be obtained cheaply at the moment.
/johnny
If they're using their own money, why complain? The only way they'll make money is if they sell the oil when prices are higher than when they bought. By doing so, they will have acted to reduce the gap between the high and low prices. That's a good thing.
If they end up buying high and selling low, they'll make the price gap worse than it would otherwise have been, but if they're using their own money to do that they'll lose more themselves than they'll cost everyone else.
Of course, if they figure out a way to leave the taxpayer on the hook when they buy high and sell low, then they'll nail everyone coming and going.
I can just imagine those little Wall St faggots astride their big bad super tanker toy
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