Morgan Stanley to store crude at sea
Alaric Nightingale LONDON
MORGAN Stanley hired a supertanker to store crude oil in the Gulf of Mexico, joining Citigroup Inc and Royal Dutch Shell Plc in trying to profit from higher prices later in the year, two shipbrokers said. The ship is the Argenta, capable of carrying more than 2 million barrels, Paris-based Barry Rogliano Salles and Athens-based Optima Shipbrokers said in reports. Morgan Stanley officials in London didn’t immediately reply to three phone messages seeking comment. Banks and c o m m o d i t y 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. “It’s a window of opportunity that won’t last long,” Gareth Lewis-Davies, a London-based energy analyst at Dresdner Kleinwort Group, said by phone. There may only be four or five banks with the expertise to make the trade, he said. Frontline Ltd, the world’s biggest owner of supertankers, said January 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 so-called contango pricing structure in oil has been caused by excess supply as demand slows and speculation that output cuts by the Organization of Petroleum Exporting Countries will reduce the glut later this year. The easiest types of oil to buy for the trade are likely to be either West Texas Intermediate or the North Sea grades Brent, Forties, Oseberg or Ekofisk. That’s because they are the ones used to settle the mosttraded 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. Phibro LLC, Citigroup’s commodities trading unit, has the 1 million-barrel carrier Ice Transporter stationed off north Scotland and also hired the supertanker Ashna to store. Shell, Europe’s largest oil company, booked two supertankers. — Bloomberg
Comments:
Well, While going through the ET today I read this news and was thinking what is written is true then it is obvious that the demand in Oil is going to get increased in later part of the year and that means USA economy should be showing some good nos in second half of this year .
Now if the Oil demand increases once again it also says that the comsumption has increased and that means world economy is coming back to normal.
Crude prices are at where they were in 2003 and so is inflation.While thinking what has happened in 6 months that crude has gone down from a high of $147 to $33 and what happened suddenly to the financial sector that all banks and financial insti like CITI, Lehman, Bear Stern,Merill Lynch ,BOA,Freedie Mae and Freedie Mac the most two trusted mortagage entity of US government went down.
How can such things happens?Is it a ploy to swallow money of overseas countries invested in big financial US co written above?
How come the Oil demand come so less that the prices fall to $33?Is that possible?
Well, I am in USA since last Feb and have started seeing the first debacle that happened of Bear Stern...and then it is a history.....as each and every big financial house got broked.
I am seeing no problem whatsoever with people here.They are just fine and there is no panic.Cars are running on the road as usual .They are just seen when I landed here.And that is the trick .The Gas prices has come down so much as low as $1.47 /gl which was $4.69/gl just 4-5 months back that people do not feel the pinch for driving a car for whatever reason they need to drive.I don't think any country hass decreased the prices of Gas/petrol prices as much as USA can/has done and that is where the trick is.The prices get decreased with the crude prices going down which do not happen with rest of the world.
I would like to know from my blog readers if any country use to decrease the Petrol/gas prices as much as USA do....
But looking at the above news it seems that second half we are going to see a turnaround in US ecocnomy.US economy is worth 25% of world GDP and if US economy makes a good turn around then we can see crude coming back to $60-70 by end of the year or early next year.
I again rewrite that I may prove wrong in all my assumptions as they are after all guessings and one can go totally wrong.
One Offtopic talk:
Regarding Kashmir, when Kashmir is an integral part of India and while our army is there at the border then why the hell we need to talk with Pakistan for Kashmir.There is no issue for Kashmir if only there can be talk on Kashmir then it should be only of Pakistan occupied Kashmir(POK) which was taken away by Pakistan in 1965.I do not know how that happened and how that much part is with Pakistan but that is rediculous that some part of Kashmir is with pakistan and we called as POK as they are supposed to be not the owner.The Kashmir that is under Indiasovernity why we need to talk about that with Pakistan?I don't understand the whole issue?If Kashmir is with Pakistan then why the hell Indian army is there?And if Kashmir is with India then why the hell we need to talk with Pakistan?
Can any politician answer me this question?
Dear Rajeev,
ReplyDeleteOne more news I came across ispested bellow. Yours comments please.
-Dinesh Chhajed
TOO DIFFICULT TO BELIEVE (hopefully it isn't true)The financial irregularities in Satyam Computer Services Limited, due to which investor's confidence has been badly shaken, will pale into insignificance in contrast to the scale of irregularities perpetuated in Reliance Industries Limited (RIL), India 's largest private sector company.RIL's Chairman and Managing Director, Mr. Mukesh Ambani, richest Indian in the world today, has invested about Rs. 570 billion (USD 12 billion), that too over a span of only two years, resulting in increase in his personal shareholding to 51% Over the last 2 years, Mr. Mukesh Ambani has increased his shareholding in RIL by: · Purchase of 410 million RIL shares from various unrelated entities for Rs. 328 billion (USD 7 billion); · Purchase of 60 million RIL shares through stock exchanges for Rs. 50 billion (USD 1 billion); and · Acquisition of 120 million RIL shares through preferential allotment for Rs. 170 billion (USD 4 billion).Apart from above, Mr. Mukesh Ambani has also invested in: · Reliance Gas Transportation Infrastructure Limited - Rs. 7 billion i.e. USD 150 million; · Reliance Life Sciences Private Limited - Rs. 15 billion i.e. USD 300 million; and · Reliance Petroleum Limited - Rs. 4.5 billion i.e. USD 100 million.Thus, Mr. Mukesh Ambani has in last 2 years invested an astonishing sum of Rs. 570 billion (USD 12 billion), while Mr. Ambani has received: · Only Rs. 500 million (USD 11 million) as salary and commission from RIL, and · Dividend of Rs. 750 million (USD 16 million) from his shareholding in RIL in past 2 yearsAs required by Indian regulations, the above purchase of RIL shares by Mr. Ambani has been fully disclosed to Indian stock exchanges and is publicly availableFurther it is interesting to note that Mr. Mukesh Ambani has not sold any of his equity holding in RIL, as there is no disclosure to SEBI and stock exchanges ?? in fact it has only increased. The fundamental question therefore is how Mr. Mukesh Ambani has financed his investments of over Rs. 570 billion (USD 12 billion) without having any publicly-known source of income. Insiders know that all these funds have been illegally siphoned off from RIL, through a complex maze of private companies, and he has used these siphoned funds to acquire RIL shares and to meet his other investment commitments. If this is not the case where has the money come from?The above fraud of gargantuan proportions will be revealed and unraveled soon! It is understood that Indian governmental agencies are aware of these transactions and it is only a matter of time that formal investigations will commence. A former Indian defense minister, and leader of one of the India's prominent political party, has written to the Prime Minister and urged him to direct investigations into the affairs of Mr. Mukesh Ambani and RIL.