
Morgan Stanley Hires Supertanker to Store Oil in Gulf  - chaostheory
http://www.bloomberg.com/apps/news?pid=20601087&sid=aIbVHft2R3SE&refer=home
======
andr
Morgan Stanley Said to Cancel Tanker for Oil Storage.
[http://bloomberg.com/apps/news?pid=20601087&sid=aSia8gPt...](http://bloomberg.com/apps/news?pid=20601087&sid=aSia8gPtSK4g&refer=home)

------
steveplace
It's because there's contango in oil futures right now.

The spread between front month futures and november is something along the
lines of $30 a barrel.

So you buy a front month future, take delivery, simmer, and sell a november
future. If the profit from the futures arb is worth more than the opportunity
cost (tanker rental), then it's a good play.

~~~
gravitycop
_$30 a gallon._

Barrel?

~~~
eru
Welcome to Germany.

------
jwb119
i'm not sure why the article doesn't mention it, but one of the reasons this
makes sense for MS is the rising "contango" in oil futures (see
<http://en.wikipedia.org/wiki/Contango> and
<http://www.energytribune.com/articles.cfm?aid=1214>)

essentially the market is betting that oil prices will rise in the coming
months, which puts storage space at an obvious premium.

------
gravitycop
_Morgan Stanley hired its tanker at $68,000 a day, the two brokers said. That
works out at $1.02 a barrel a month, based on a 2 million-barrel cargo._

~~~
alecco
[http://zerohedge.blogspot.com/2009/01/zany-profit-idea-of-
da...](http://zerohedge.blogspot.com/2009/01/zany-profit-idea-of-day.html)

    
    
      Friday, January 16, 2009
      Risk-Free Profit Idea of the Day
      Posted by Tyler Durden at 1:47 PM
      Buy: Barrels of Oil (we do not have a position in this "security" so we hope the SEC does not bust our front door in an hour for position peddling)

~~~
gravitycop
<http://news.ycombinator.com/item?id=424877>

<http://news.ycombinator.com/item?id=426142>

~~~
alecco
Edit of the comment gave me a blank page at that time.

~~~
gravitycop
HN is sagging under the load of new users. Sometimes, in the middle of the
day, it serves up blank pages. Also, since the edit limit is one hour, if one
clicks the edit button at 59 minutes (i.e. right before it disappears), the
response might be something like this:
<http://news.ycombinator.com/edit?id=440702>

------
rbanffy
Is it only me or I am not the only one worried about what can happen with such
a big high-value sitting duck?

~~~
andr
There are hundreds of tankers out there just like it. Plus, an attack on one
would hurt nature more than anything else.

~~~
rbanffy
Prior to 2001 I would seek a financial justification for such attacks. Sadly,
we can no longer count on such rational behaviour.

------
gills
Really? We gave these banks TARP money and they're out spending it on hoarding
_oil_ so they can jack consumer prices later? Talk about sleazy.

~~~
gaius
Well, if you're a commodities trader, ideally you want to buy something then
sell it quicker than it takes to ship it. Then it can physically be
transported directly from the seller to the buyer. "Taking delivery", as it's
called, is a nightmare for the typical commodities trader, who generally has
_absolutely no idea_ what to do with it, and doesn't want to pay for
warehousing out of his potential profit.

One tankerload of oil isn't going to be enough to move the market. I suspect
what happened was they vastly overpaid for it and can't for whatever reason
bear to just write it off.

~~~
gravitycop
_One tankerload of oil isn't going to be enough to move the market._

From the article:

 _Frontline Ltd., the world’s biggest owner of supertankers, said Jan. 14
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 futures that are higher than the spot price._

The world uses about 86 million barrels of oil per day.

------
pclark
so are the ships crewed? they just sit at sea?

~~~
jhancock
a job on this crew may qualify as one of those "what job can I do that allows
me plenty of time to work on my startup?"

~~~
eru
Do they have internet access?

~~~
jhancock
of course they do, its a dream job. they have shuffleboard, a swimming pool,
jogging track, helicopter pad for visits from the bankers that want to check
on their hordes of oil...all the normal accouterments of a super tanker ;)

~~~
eru
But --- do they have Ninjas to keep the pirates off-board?

