The search for storage
In the fourth of a six-part series, our trader looks back at a time when oil was the best commodity one could hold
Contango benefits anyone with access to storage because the prompt price of crude is cheaper than crude bought in the future. So it works really well for a refinery that has excess storage. When managing supply and hedging around a 200,000-barrel-a-day refinery we had crude storage of close to 2m barrels. The company had rarely kept storage completely full but the contango was too large to have empty space, and so a plan was created to secure a long-term ratable supply of crude from a Middle Eastern producer. We wanted to maintain 1.8m barrels of inventory at the refinery. As soon as we were confident enough of securing the supply, we bought front-month futures contracts and sold those we ha
Also in this section
22 April 2026
The failure of OMV Petrom’s keenly watched exploration campaign at Bulgaria’s Han Asparuh block highlights the Black Sea’s uneven track record, despite major successes like Neptun Deep and Sakarya
22 April 2026
Sustained strikes on ports, terminals and refineries are testing the resilience of Russia’s oil export system, yet rapid repairs, rerouting and surging prices mean the campaign has yet to deliver a decisive blow
21 April 2026
After overcoming a COVID-induced demand collapse with several years of successful market management, geopolitical events have conspired to provide the pact’s biggest test to date
21 April 2026
The regime’s policy of using nuclear ambiguity as a deterrent may have failed but it has realised it has other cards to play, while its neighbours are reappraising their approach to security
