How do market participants use oil tankers?

Discussion in 'Commodity Futures' started by Rickylee, Oct 7, 2018.

  1. Rickylee

    Rickylee

    Hi All,

    I'm trying to understand the use of oil tankers in the market and how they are used by various market participants, specifically when stockpiling.

    I understand that Platts, and similar organizations, track oil tankers and release data to indicate the trade flows but it's the offshore storage (stockpiling) that interests me.

    I assume that this is done by speculative players in the market.....

    Any comment would be appreciated.

    Thanks
     
  2. Robert Morse

    Robert Morse Sponsor

    If you can buy Oil in the cash market,cover the storage costs and sell a futures contract at a higher price to include a proper profit, that would be once example.
     
  3. Rickylee

    Rickylee

    Thanks for the reply Robert.

    Do you know where data, like that, can be monitored?

    Also, does that mean that the opposite would also be true i.e. If floating storage levels are at a minimum, then the market is in backwardation?
     
  4. Robert Morse

    Robert Morse Sponsor

    I'm sure the industry has a trade journal with data, but I do not know where to find that,
    If the futures market is in backwardation, there is no for storage from speculators. Floating storage levels go down and so do rates because it is worth more to just sell the inventory and unwind the short future.

    I'm not an expert on this.
     
    drm7 likes this.
  5. Rickylee

    Rickylee

    Thanks Robert.