Crude Supply and Shipping
* The market tribulatiions have knocked crude prices out of whack, with the near months pressured by lack of demand, etc vs the 2009 futures at $12 - 15/bbl more. It has been reported that Koch and Shell are taking advantage of the price difference by buying crude and storing it on tankers.
* Tankers sitting in port as storage containers aren't competing for open contracts to deliver crude around the world. Fewer ships to transport crude favor ship owners. A ship sitting in port burns how much bunker fuel ... ?
Buyers: Depending on internal funding, lets try to calculate how many ships that might be. For economy and profit I'd want to use vlcc's ... 1 to 2 million barrels of crude. So, if crude is $42/bbl ... 1 vlcc could be holding $42 - 84 million dollars of crude to be foward sold at next year's futures price. Maybe 15 - 20 ships?
Sellers: if you're Saudia Arabia, and it only costs you $2 per barrel to pump crude from the ground, that same vlcc holding $2 to 4 million in Saudi crude could be worth $12 - 15/bbl more in 2009. So, if you're Saudi Arabia, why not just reduce production and leave it in the ground ... look at the political picture. Iran and Venezuela are, or were, sabre rattling at $147/bbl crude. What have you heard, crude down to $40 - 50/bbl, from them lately ... not a peep ?? So, maybe 20 - 30 ships more ...
Which is really good for the shipping companies: DHT, FRO, NAT, SFL, VLCCF, etc