contango

Contango: Oil Storage Space the Need of the Hour

Rajesh Nair and Rohan Menon throw light on the present market situation concerning crude oil and LFSO in S & P Global Platts. They also discuss on the challenges concerning the storage of both crude oil and LFSO. In addition they also bring forth the opinions of various industry players and experts on this present situation.

Crude oil storage vs LFSO storage
  • Singapore-based oil traders look for crude oil storage from January 2020.
  • Widening contango market and mass storage of crude oil may be...

http://mfame.guru/contango-oil-storage-space-the-need-of-the-hour/

Tanker Freight Rates Tumble Ahead of OPEC+ Talks

  • Supertanker freight rates have fallen after seeing a high last week.
  • Freight rates can drop further if OPEC+ countries decide to cut output sharply.
  • It will reduce transport and storage demand for oil and jump again if producers fail to reach an agreement.
  • Threat of big production cut combined with lower demand dampened VLCC market.
  • VLCC freight rates were at about $30,000 per day at the start of March.
  • Saudi Arabia pledged to unleash its vast crude supplies following the collapse of supply...

http://mfame.guru/tanker-freight-rates-tumble-ahead-of-opec-talks/

IMO2020: The Backwardation and Contango Conundrum

  • Front-month forward curves for Argus-assessed northwest European and US Gulf coast 0.5pc sulphur fuel oil intersect from December 2019 to January 2020.
  • The northwest European curve moving into backwardation and the US Gulf curve moving into contango.

Based on front-month forward curves of 0.5pc sulphur fuel oil, NW European curve and US Gulf curve move higher and lower than the forward price respectively, reports Argus Media.

Europe-US Gulf forward curves

The snapshot of the Europe-US Gulf...

http://mfame.guru/imo2020-the-backwardation-and-contango-conundrum/

The Likely Implications of New IMO Standards on US Diesel

  • IMO regulations was widely expected to cause a sharp increase in demand for ultra-low sulphur fuels to be blended into marine fuels in the run.
  • The benchmark for US diesel domestic markets and the pricing basis for exports have been range-bound below Nymex ULSD futures.
  • The dip in US domestic diesel demand resulted from widespread flooding across the mid-continent earlier this year, which slowed planting progress and cut diesel consumption significantly from the agricultural sector.

US diesel...

http://mfame.guru/the-likely-implications-of-new-imo-standards-on-us-diesel/

A Small Shift in LNG Market May Bring Big Boost for Shipowners

  • The complexity and cost of keeping natural gas in liquid form on ships for extended periods meant it wasn’t widely used until last fall.
  • These bets backfired when a mild winter damped requirements for the fuel, forcing traders to discharge LNG and release the vessels, which caused a crash in spot charter rates.
  • The price premium for later contracts, or contango, is building up for both spot Asian LNG prices and the U.K.
  • High storage levels in Europe means tankers are one of the few ways to...

http://mfame.guru/a-small-shift-in-lng-market-may-bring-big-boost-for-shipowners/

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