The oil glut that wiped $1 trillion off the value of energy producers and roiled currencies is giving tanker owners a reason to be cheerful: Demand for their ships to store that excess is about to surge.
Oil traders could park as much crude offshore in the next few months as Denmark consumes every year, according to estimates from JBC Energy GmbH and BP Plc data. The International Energy Agency projects on-land storage tanks in industrialized countries may be full by June.
Oil collapsed by almost half since the middle of last year as members of the Organization of Petroleum Exporting Countries maintained output amid a global excess estimated by Qatar at 2 million barrels daily. The same surplus has also helped widen a price structure called contango, where future costs are so far above today’s that it rewards traders to buy cargoes now and sell them later.
“There’s bound to be broader inventory builds,” Jonathan Chappell, a shipping analyst in New York for Evercore Partners Inc., said by phone Jan. 6. That “will probably lead to some traders taking advantage of the contango.”
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