Glencore Said to Store Oil in Ships Off Singapore Amid Contango

(Bloomberg) by Serene Cheong – Glencore Plc is said to be storing oil on ships off the coast of Singapore and Malaysia as a market structure known as contango allows traders to benefit from holding on to supplies for sale later. The commodities trader has at least 4 very large crude carriers, each of which can hold about 2 million barrels, floating at sea off the nations’ coast in Southeast Asia, people with knowledge of the matter said, asking not to be identified because the information is confidential. When a market is in contango, prices for supplies today are lower than those in future months, allowing traders with access to stored crude to potentially lock in a profit. Charles Watenphul, a spokesman for Glencore, declined to comment. While the oil market has been in contango since 2014, the premium fetched by future cargoes increased to the highest since February last month. The price difference between a Brent oil contract for immediate delivery and a year forward was at about minus $7 a barrel on Thursday, twice the level in mid-July. To benefit from the contango, profits from selling a stored cargo must exceed the cost of chartering ships to hold the

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