get one from europe/asia , all oil tankers are idle there as Brunt is trading $103 nobody is storing. and we have still one month time to bring tankers as delivery is 1 month after the contract close. deduct another $5 million for brining ships from far places deduct another $5 million for financing ( interest paid on this huge money, you pay per barrel full money that is $85,000 for oil delivary ) ... still $25 million profit . This whole thing may not be as this simple as it sounds? if so market efficiencies won't let this happen. one explanation is lots of this trading volume is intraday , if one started accumulating for eventual 10k contracts for MARCH ( and selling 10k for april ) the spread won't be at this level , spread may drop from $4.5 to $3 or below .. @Kid will have some explanation as he is the YODA of this oil trading. Kid some thoughts please ...
What a chopped out day. Indices are going nowhere in a hurry. Market's overbought and looking for a good reason to pullback IMHO. But we just trade 'em.
Apologies, I forgot i posted my long entry, hence the delay in posting the exit. Will follow guidelines in future.
Also, we don't believe you had 10 losers in a row this morning. We believe it was a shameless attempt to get us to feel sorry for you and send you Valentine's Day chocolates
Oil-storage trade http://en.wikipedia.org/wiki/Oil-storage_trade It has been estimated that one in twelve of the largest oil tankers are being used for the storage, rather than transportation of oil,[3] and that if lined up end to end, the tankers would stretch out for 26 miles. http://www.zerohedge.com/article/oil-market-outlook-when-contango-trade-unwinds Storage costs money, but how much? The U.S. EIA estimated holding - crude oil would cost a company about $1.50 and $4.00 per barrel per year depending if it owns or rents storage. ( per YEAR , so for a month period it won't cost much ) - For gasoline, the costs would be $2 and $6 per barrel per year, or $0.01 per gallon per month:
probably just a bug , but check this out http://finance.yahoo.com/echarts?s=CLH11.NYM+Interactive#symbol=CLH11.NYM;range=1d