/biz/ - Business & Finance

>>19209638
The WTI mystery isn't hard to solve, nor are the reports of a draw-down in Cushing (if of course both are true). WTI typically relies on land based storage. Texas opened another 70million barrels of storage this month, hippies, animals, and water supplies be damned.
https://www.bizjournals.com/sanantonio/news/2020/05/05/rejecting-oil-production-cuts-texas-regulators.html
That being said, $32/bl WTI is not going to result in the kind of well stutdowns previously predicted, as the low/high breakevens to continue operating new wells is around a range of $24-40/bl. Hell, some companies can open new wells at $32/bl WTI. So the underlying problem remains, it's just delayed, and I would imagine the hope is that demand recovers within that time because supply is not going to - we're not commies and we can't command them to turn off the pumps. That's a lot of storage, but we're still producing maybe 11m bl/day of WTI, and oil demand is still depressed about 20%, so who knows.

Brent is another beast and relies more heavily on maritime storage and Asian consumption. Bigtime contango is still a possibility, particularly if the US is refusing to let tankers unload and if China/India demand lags. It's not going to be insane like WTI was because the storage concerns are different (the possibility of needing to use tankers for a significant portion of WTI production is literal panic mode whereas it's just a cyclical thing for Brent), but the setup is consistently bullish for tankers.

Crude goes to refineries. Refineries create crude products. Thus, if the production of Brent continues to exceed what refiners are taking, time charter rates will rise (and spot rates via supply constriction.) Again, you never know, but the outlook seems good for the year.

>>19216733
>they see it as past its prime
A silly thought, but it makes sense if your only objective is a contango dildo. Unwinding of maritime storage means that stranded vessels get out of demurrage

>>18908312
>actual investors know that shipping rates will go back to normal
>You're lucky if tankers beat the market by a few percent in the next few years
This is a singularly ignorant statement. I'm not going to do you a favor when you spout nonsensical bullshit in the middle of the month as an "actual investor." Actual investors got into this segment in February. Actual investors are still sitting on profits since then despite the drops we just saw. Actual investors are going to tell you to go fuck yourself and look at scrapping rates during the height of the bust in 2018, environmental regs that just went into effect, total current freight capacity, and freight rates at the end of 2019.
> DHT has still almost 800 million in debt, two good quartals aren't enough to pay that off.
See above, there was a reason DHT was 800 mil in debt because it didn't scrap, and there is a reason in previous threads I said DHT and FRO in particular were going to lag behind their peers if your purpose is to speculate into short term contango.
>So? Can you tell me which of my points you are adressing with your ramblings?
This one I'll make real simple for you:
Lots of people in Asia with stinky butts and squinty eyes
Need blacky black to hit babies with trucks and do tech support
Blacky black from Texas is actually bretty good
But is far away =(
So get blacky black from middle east I guess
BUT WAIT
Blacky black from Texas just got cheap because fracky frack ^_^
Tanker-chan now gets to sail aaaaaaall the way from the wondrous united states of america to ching chang china and the mysterious land of poo
Longer trip means more moni yaaaay
Tanker chan is pleased
>>18908413
Here's what I see:
V shaped recovery that Goldman predicts - tankers should be fine for the same reason they were doing great EoY 2019
Non-V shaped recovery - tankers play contango

FOMOs and naysayers who both don't understand the space are the reason these stocks are being so wonky

>>18908772
No

>>18892208
>Those are just for VLCCs?
Yes
>Do they make up most of the earnings for DHT
https://www.dhtankers.com/vessels/
Here is the fleet, do your own homework.
>What im trying to understand is if that 66% is a significant value they’re moving to Q2
VLCCs reserved for the spot market (i.e., holding crude for futures traders) will essentially double their revenues for 66% of Q2. Tell me, do you think doubling your revenues for 21 VLCCs operating in the spot market is significant? Say, an extra $60k per day times 21 tankers times 60 days plus whatever else they make off of the remainder of those days?

Protip: this one doesn't require a lot of research.