Contango is back

It's a pretty private market, but Marex Spectron offers a daily report, while Clarksons and RS Platou occasionally publish rates online.

Found another. Petalidi left the Sea Island terminal at Ras Tanura Aug 12 - probably carrying ~1.0mm bbl mix of Arab Light/Medium for blending - and about to discharge in Saldanha.

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Not sure who booked the AG/South Africa voyage, but Mercuria last week booked the same vessel to carry West African crude to South Africa according to Clarksons. They look to be building quite an inventory.

Can you tell this is a hobby of mine yet?
 
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The saga continues. TI Europe is a beautiful ship. She was involved in a similar fuel oil time arb a year or two ago based in the ARA complex.

Her three cousins have already been converted into FPSO vessels if I remember correctly.
 
ogarbitrage said:
The saga continues.
More...

This article seems to infer that this still involves a fair element of risk and will depend on a favourable move in the outright to get them over the line. I am wondering what kind of spreads you would need to see before traders started feeling comfortable enough to really start moving into the storage trade?
 
I think there are some blending economics in this equation we're unaware of.

As to your question, it's hard to say as it's really a subjective number relative to the trade, the available products, the holding or transport time, cost of funds, and the logistical assets available. The typical margin, from what I understand, is usually on order of 0.5 - 1.5% of notional value.
 
This one is interesting. VLCC Marina left the Galp Sines refinery in Portugal empty on July 18. It proceeded to head South, stopped in Tenerife for bunkers, proceeded to Gulf of Guinea, conducted a ship to ship transfer of crude from Lagos or Lome, taking on ~1.75-2.0mm bbls, then down to Saldanha.

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I see you've got your Sherlock hat on again! Are you able to assume that all of this is going to storage or is there just as much chance that this being delivered to a refinery ( I think I read somewhere that there's a large caltex refinery nearby)?
 
Hard to tell how much is going to storage vs. local consumers. Making some assumptions based on the chartering and voyage history of several of the vessels coupled with the media reports and view of the Brent and Dubai curves.

It does seem possible to purchase bbl of LATAM crude on a WTI basis, purchase bbl of Mideast crude on Dubai basis, buy several West African cargoes priced against Brent, blend it all together and parcel out as a premiums to forward Brent or Dubai/Oman. There exists a large degree of optionality with storage and logistical assets. As observers, this is all speculation.
 
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