Jonathan Chappell of Evercore ISI says contango has steepened substantially in the last few days making storage potentially profitable for traders.
“It is very difficult to predict the amount of tonnage that could be absorbed by this trading arbitrage, particularly as the duration of the current favorable economics is unknown,” Chappell said in a report today.
“However, in a crude tanker market that is already tight, the removal of just a few ships from the trading fleet for three to six months could provide additional upside potential to the current strong rate environment.”
Chappell
