Oil contango and storage cost

[Dannytrading]

All these oil ETF that wall street tries to market to unknowledgeable retail investors lose money due 'contango' the roll over of contracts is 3-5% for rolling over contracts.
ETF like UWT niave retail investors think they own oil when it's really just derivative or ETN mainly created for daytrading oil. There are people who don't read the SEC prospectus and buying like a stock and holding in their retirement fund and think it's tied to the price of oil. and they complain to SEC that they lost money buying and hold the UWT ETN and didn't bother spending 5 minutes reading the SEC prospectus and lay down $20,000 on the 'stock' as an long term buy and hold 'investment''

How can people invest in oil other than these oil ETF which all have contango.?

Can you buy oil at $20. take delivery and store at cushion oklahoma and pay storage?
How long can you store oil in these oil tankers or store oil in cushion oil tanks and take delivery at $20/barrel and store it there and hold it for 1 year or even 2 year?

I heard that oil hedge funds were taking delivery of oil and storing oil tankers and cost like $1/barrel
5% per month of value of oil. so if oil stays the same. you lose 5% /month holding oil in oil tankers?

 

[schizo]

All these oil ETF that wall street tries to market to unknowledgeable retail investors lose money due 'contango' the roll over of contracts is 3-5% for rolling over contracts.
ETF like UWT niave retail investors think they own oil when it's really just derivative or ETN mainly created for daytrading oil. There are people who don't read the SEC prospectus and buying like a stock and holding in their retirement fund and think it's tied to the price of oil. and they complain to SEC that they lost money buying and hold the UWT ETN and didn't bother spending 5 minutes reading the SEC prospectus and lay down $20,000 on the 'stock' as an long term buy and hold 'investment''

How can people invest in oil other than these oil ETF which all have contango.?

Can you buy oil at $20. take delivery and store at cushion oklahoma and pay storage?
How long can you store oil in these oil tankers or store oil in cushion oil tanks and take delivery at $20/barrel and store it there and hold it for 1 year or even 2 year?

I heard that oil hedge funds were taking delivery of oil and storing oil tankers and cost like $1/barrel
5% per month of value of oil. so if oil stays the same. you lose 5% /month holding oil in oil tankers?

Avoid Contango and only invest in times of Backwardation.

But are you a hedge fund manager? If not, then who cares?

 

[Alexpung]

Buying oil at spot price and store it in a container (which cost $$$) is exactly what those ETF/oil future represent.

How else you "invest in oil" without having to find a place to store it? This is just physical reality.

 

[MichalTr]

All these oil ETF that wall street tries to market to unknowledgeable retail investors lose money due 'contango' the roll over of contracts is 3-5% for rolling over contracts.
ETF like UWT niave retail investors think they own oil when it's really just derivative or ETN mainly created for daytrading oil. There are people who don't read the SEC prospectus and buying like a stock and holding in their retirement fund and think it's tied to the price of oil. and they complain to SEC that they lost money buying and hold the UWT ETN and didn't bother spending 5 minutes reading the SEC prospectus and lay down $20,000 on the 'stock' as an long term buy and hold 'investment''

How can people invest in oil other than these oil ETF which all have contango.?

Can you buy oil at $20. take delivery and store at cushion oklahoma and pay storage?
How long can you store oil in these oil tankers or store oil in cushion oil tanks and take delivery at $20/barrel and store it there and hold it for 1 year or even 2 year?

I heard that oil hedge funds were taking delivery of oil and storing oil tankers and cost like $1/barrel
5% per month of value of oil. so if oil stays the same. you lose 5% /month holding oil in oil tankers?

If you want to profit from eventual further oil higher prices what you need to thing about is correlation. You can do at least 4 things:

1. You can buy underpriced shares of oil producers. e.g. Gazprom. Prices of those companies are highly correlated (of course not always) with oil prices. You don't loose because of contango and you earn dividends.

2. You can buy ETF (but not oil ETN based on futures or CFDs, UWT, that you mentioned is in fact ETN not ETF, you must think on what is it based) that is based on oil sector (so companies or energy index), not based on oil as commodity.

3. You can buy petro currencies. CAD is good example.

4. You can buy tankers. If producers assume that oil price will be higher in the future. They need to store it. So demand for tankers is rising, so prices of tankers are rising.