• 6 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes WTI @ $75.75, headed for $64 - 67
  • 38 mins U.S. Shale Oil Debt: Deep the Denial
  • 14 hours Satellite Moons to Replace Streetlamps?!
  • 2 days US top CEO's are spending their own money on the midterm elections
  • 1 day EU to Splash Billions on Battery Factories
  • 11 hours The Dirt on Clean Electric Cars
  • 9 hours Owning stocks long-term low risk?
  • 2 days The Balkans Are Coming Apart at the Seams Again
  • 2 hours Can “Renewables” Dent the World’s need for Electricity?
  • 2 days Uber IPO Proposals Value Company at $120 Billion
  • 2 days A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 2 days OPEC Is Struggling To Deliver On Increased Output Pledge
  • 2 days 47 Oil & Gas Projects Expected to Start in SE Asia between 2018 & 2025
  • 1 day The end of "King Coal" in the Wales
Editorial Dept

Editorial Dept

More Info

Trending Discussions

High Storage Levels Point To Lower For Longer

Friday, February 12, 2016

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. Contango widens again

 

- The oil market contango is back. A contango is a phenomenon in which front-month oil contracts are cheaper than oil delivered at some point in the future. A contango illustrates the near-term state of oversupply, as producers can’t find enough buyers for their crude today.
- The contango for Brent and WTI grew in recent weeks. The gap between front-month and year-ahead contracts – often called the 13th-1st month futures spread – increased to $7.75 per barrel in January for Brent, the highest in almost a year.
- But in February, the contango expanded even more. The WTI 13th-1st jumped to over $11 per barrel.
- A couple of takeaways: the rising contango is an effect of deeper state of oversupply. Storage is running low in key parts of the U.S., forcing near-term prices to suffer larger discounts.
- Also, floating storage becomes economical somewhere around $10 to $12 per barrel. More companies will be stashing oil at sea if the contango sticks around. Glencore, the mining giant, said in late January that it is storing oil at sea off the coast of Singapore.

2. Storage levels…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions





Oilprice - The No. 1 Source for Oil & Energy News