Bailout Banks hoarding Crude Oil

[kenny]

Morgan Stanley who recently converting from a Investment Bank to a Bank holding company so they could recieve a $10,000,000,000 bailout package is seeking a Supertanker to Store Oil..

By Alaric Nightingale and Todd Zeranski

Jan. 15 (Bloomberg) -- Morgan Stanley is seeking a supertanker to store crude oil, joining Citigroup Inc. and Royal Dutch Shell Plc in trying to profit from higher prices later in the year, four shipbrokers said.

The bank has yet to find a suitable vessel, said one of the brokers, all of whom asked not to be identified because the information is private. Carlos Melville, a spokesman for Morgan Stanley in London, declined to comment.

?There?s a lot of people looking for storage,? Denis Petropoulos, London-based head of tankers at Braemar Shipping Services Plc, the world?s second-largest publicly traded shipbroker, said by phone.

Banks and commodity traders are seeking new ways to make money after the Standard & Poor?s 500 Index fell by the most since 1937 last year and crude oil prices dropped more than $100 a barrel from their peak. Companies including Koch Industries Inc. and BP Plc are hoarding enough crude at sea to supply the world for almost a day.

Frontline Ltd., the world?s biggest owner of supertankers, yesterday said about 80 million barrels of crude oil are being stored in tankers, the most in 20 years. A purchaser could buy oil now, keep it for months at sea and fetch better prices by selling oil futures that are higher than the spot price.

The so-called contango pricing structure has been caused by excess oil supply as demand slows and speculation that output cuts by the Organization of Petroleum Exporting Countries will reduce the glut later this year.

Tanks Filling Up

Slumping U.S. oil demand means tanks are filling at Cushing, Oklahoma, the pricing point for the benchmark West Texas Intermediate grade. Futures contracts indicate WTI will gain an average of about $2.15 a barrel a month until December.

Supertanker storage deals are being done at about $75,000 a day, according to Petropoulos. Assuming the ship has a 2 million- barrel cargo, that works out at $1.12 a barrel over a 30-day period. Traders also need to pay financing and insurance costs.

Phibro LLC, Citigroup?s commodities trading unit, has the carrier Ice Transporter stationed off north Scotland, according to people familiar with the matter. Shell, Europe?s largest oil company, has booked the supertankers Leander and Eliza.

Oil traders hired two more ships to store North Sea crude off Scotland?s Orkney Islands. The 2 million-barrel supertanker Luxembourg is scheduled to arrive at Scapa Flow on Jan. 21 while the 600,000-barrel transporter Atlantic Galaxy is already there, said Captain William Sclater, operations manager at the port.

Oil Grades

The easiest types of oil to buy for the trade are likely to be either WTI or the North Sea grades Brent, Forties, Oseberg or Ekofisk. That?s because they are the ones used to settle the most-traded futures contracts.

Other oils, such as those from the Middle East and Africa, are usually bought and sold at prices related to the main European and U.S. grades. Because those prices fluctuate, it means traders assume an extra risk by hoarding them.

Morgan Stanley owns half of Heidmar Inc., which operates smaller oil tankers. Heidmar hasn?t had demand for its tankers to store oil, probably because they aren?t the largest supertankers that investors need for the contango trade, Tim Brennan, the company?s chief executive officer, said by phone Jan. 8.

http://www.bloomberg.com/apps/news?p...IkY&refer=home

[Fletch XXX]

yeah American tax dollars going to fund banks so they can horde (buy/store) fuel and raise prices.

[tranza]

Everything's about money! haha

[kenny]

Originally Posted by Fletch XXX

yeah American tax dollars going to fund banks so they can horde (buy/store) fuel and raise prices.

yeah, talk about being fucked over twice

Whats next hoarding food to treat it as an investment class? Although they already hoard food by way of paper contracts.

[kenny]

See.. we setup this bailout package to ease lending to fix the economy. Lower the FED rate to help inject capitol to ease lending. What does the bailout banks do? Lets look at Citibank (45 Billion bailout plus insurance for securities)



Raised interest rates to its consumers. (Exact opposite of easing lending)

Spent $400 million for the naming rights of a baseball stadium.

Leased oil tankers so they can physically hoard crude oil to inflate prices.


Atleast we know who runs this country..

[sortie]

Originally Posted by kenny

See.. we setup this bailout package to ease lending to fix the economy. Lower the FED rate to help inject capitol to ease lending. What does the bailout banks do? Lets look at Citibank (45 Billion bailout plus insurance for securities)



Raised interest rates to its consumers. (Exact opposite of easing lending)

Spent $400 million for the naming rights of a baseball stadium.

Leased oil tankers so they can physically hoard crude oil to inflate prices.


Atleast we know who runs this country..

Same ol' same ol'.

[GetSCORECash]

Atleast they aren't idiots, and are trying to make a profit from the gifting the US government is providing them.

The US government should be filling up their Oil reserves now, just like the banks seam to doing.

[ADL Colin]

Contango. Contangoooooooooooooooooo.
Daylight come and me wan' go home

Come, Mister tally man, tally me banana
Daylight come and me wan' go home
Come, Mister tally man, tally me banana
Daylight come and me wan' go home

[_Richard_]

that's pretty funny

[AlienQ - BANNED FOR LIFE]

Originally Posted by kenny

Spent $400 million for the naming rights of a baseball stadium.

Where you read this?

[ADL Colin]

Originally Posted by AlienQ

Where you read this?

Old news. Deal was made years ago.

[marketsmart]

i have been buying up cases of motor oil..

when oil goes back up i am going to be rich....

[pornguy]

Dont worry Obama will save us.. Dont you know that already?????


Ahahahahahahahahahahaha

[kektex]

OK, how can I buy oil?
Can I buy oil like I can buy stocks or gold?
If the banks are doing it right now we should all be buying oil futures!

[kenny]

Originally Posted by kektex

OK, how can I buy oil?
Can I buy oil like I can buy stocks or gold?
If the banks are doing it right now we should all be buying oil futures!

When you buy oil futures you have a set amount of time where you either thave to sell that future or take delivery of the oil.

The banks have resorted to taking delivery that way they can buy cheap and hold onto it long enoughy to make a big profit.

[kektex]

Originally Posted by kenny

When you buy oil futures you have a set amount of time where you either thave to sell that future or take delivery of the oil.

The banks have resorted to taking delivery that way they can buy cheap and hold onto it long enoughy to make a big profit.

Ah so I can sell at a loss if the price has decreased or I better make room in my garage for the barrels?

[kenny]

Originally Posted by kektex

Ah so I can sell at a loss if the price has decreased or I better make room in my garage for the barrels?

It depends on how the contract is setup. You would probably need to pick it up somewhere and store it in a huge tank.

I think the minimum is 1000 barrel orders. Hope you have room

[pocketkangaroo]

They're going to have to horde it for awhile since oil is not going up for a long time. In fact, I think oil drops below $30 in the near future.

[JD]

fightclub ftw