(Bloomberg) by Javier Blas – In a world awash with cheap oil and plunging profits, one obscure corner of the energy business is shining brightly: the owners of storage tanks. While not nearly as famous as giant oil producers like Exxon Mobil Corp. and Royal Dutch Shell Plc, storage companies including Vopak NV, Kinder Morgan Inc., Oiltanking GmbH and Magellan Midstream Partners LP are among those benefiting from rising demand for onshore tanks — and higher prices to rent limited space. “Storage is king,” said Jean Francois Lambert, global head of commodity finance at HSBC Holdings Ltd. in London. “Good tanking at the right location could make money.” Driven by record production from shale fields, the oil glut is bigger in the U.S. than any other region, and particularly large around the hub of Cushing, the Oklahoma town that calls itself the “pipeline crossroad of the world.” The International Energy Agency anticipates that total U.S. stocks levels, already at a 80-year high of 459 million barrels, may soon test the limits of the country’s tank capacity. In the U.S. and beyond, traders are filling tanks to take advantage of contango — a relatively rare situation where forward prices are higher … continue reading
The post In a World Awash With Crude Oil, Storage Companies Are Kings appeared first on CTRM Center.
Source: CTRM Center