Dozens of oil tankers cluster off the coast of Texas due to oil price fall

Re:Dozens of oil tankers cluster off the coast of Texas due ... by hammock on Friday November 13, 2015 @12:39PM (#10561105)

Zero Hedge had a good piece on this yesterday and goes a bit into contango, where future prices are higher than spot prices, essentially incentivizing these tankers to just sit in the water.

http://www.zerohedge.com/news/2015-11-12/something-very-stra...

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Re:Dozens of oil tankers cluster off the coast of Texas due ... by nraynaud on Friday November 13, 2015 @12:57PM (#10561228)

what I don't get is that if there are future contracts, they have to be fulfilled when the time comes, wasn't all this oil bought in advance with future contracts? I guess actual users of the oil have actually ordered it before as opposed to speculators, they need it now don't they?

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Re:Dozens of oil tankers cluster off the coast of Texas due ... by pjh68 on Friday November 13, 2015 @02:09PM (#10561754)

Buy spot price, sell a future immediately. Works if the storage cost (i.e. keeping the ship & crew out of port) is greater than the spread.

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