BLOOMBERG.COM
OPEC’s decision to pump less is poised to deter some oil traders from hoarding crude at sea. The group’s pledge to cut output and ease a global glut has weakened a market structure known as contango that benefited traders who stocked crude on ships to be sold at a potential profit in the future. The planned reductions have boosted the value of earlier-loading oil relative to cargoes for later, meaning returns from stored supplies aren’t going to be enough to offset the cost of chartering a tanker for months.
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OPEC’s decision to pump less is poised to deter some oil traders from hoarding crude at sea. The group’s pledge to cut output and ease a global glut has weakened a market structure known as contango that benefited traders who stocked crude on ships to be sold at a potential profit in the future. The planned reductions have boosted the value of earlier-loading oil relative to cargoes for later, meaning returns from stored supplies aren’t going to be enough to offset the cost of chartering a tanker for months.
Read more>