[ken21]

they must think oil will go up significantly.

[TigerLikesRooster]

Iran and Russia.

[dennisw]

they must think oil will go up significantly........

And if it doesn’t you and me get to bail them out

[blam]

"they must think oil will go up significantly."

Expecting an Isreaeli raid on Iran?

[javachip]

they must think oil will go up significantly.

Nope. The spread between the cash price of oil and the futures is big enough that this makes sense. It's low risk money if you can round up enough cash to do it and know what you're doing (I don't qualify on either count).

Buy oil for Feb delivery at $35-36 a barrel, simultaneously sell oil for Mar delivery at a little over $42 a barrel. But you need to store it somewhere for the month. At current rates it costs a little over $2 million a month to charter a VLCC. Those hold about 2 million barrels of oil.

Buy 2 million barrels, sell it for $6 a barrel more than you paid. Pay another $2 million to charter the tanker, throw in whatever other expenses are involved and the trader makes a very nice profit on the deal.