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I want to ask everyone a few things about oil and the storage of it. Here goes...

First, I've heard and read that lots of it is being stored offshore in supertankers and onshore in other types of tanks such as those in Cushing, OK (take a look at Cushing using Google maps for some pretty impressive pics). I've also heard that worldwide countries are pretty much out of storage capacity, yet there is more capacity here in the U.S. Here are some questions...

1. I know that if I put gasoline in the tank of my lawn mower and let it sit without some kind of fuel stabilizer, it will turn to turpentine and be useless. Is there some kind of additive or stabilizer that needs to be mixed in with the oil to enable long-term storage?

2. Is long-term storage different in cold places like Canada vs. a place like Houston where it doesn't get below freezing that often? If so, do you have any comments on how much this might cost per barrel?

3. I spoke with someone yesterday who seemed to know quite a bit about the tanker business and he said the going daily rate for a large tanker now is $104,000 per day! How much per barrel this would add per year to the cost of a barrel of oil stored on said tanker?

4. Does anyone know of any companies engaged in building storage tanks for the oil industry?

Are there any other points or relevant comments or websites that you can share? Even if I was considered to be a so-called expert in precious metals, I figure it would be good to also know more than I do about oil since many people lump them both into the Basic Materials sector. I await your thoughts and comments.

1 no
2 no
3 if you know that daily cost then do the math
4 use google

#3 I guess you would need to know how many barrels of oil a large tanker holds in order to calculate this.

tt

Recyclersteve wrote:3. I spoke with someone yesterday who seemed to know quite a bit about the tanker business and he said the going daily rate for a large tanker now is $104,000 per day! How much per barrel this would add per year to the cost of a barrel of oil stored on said tanker?

Google wrote:The largest tankers trading today are comparable in size and can carry up to 2 million barrels of oil.

$104,000 / 2,000,000 = 5.2 cents per barrel each day

.052 x 365 = $18.98 per barrel for one year

So at $18.98/barrel/yr. you are paying over 50% of the cost of a barrel just to store it for a year. Doesn't that seem awfully expensive or am I missing something? On the other hand, if you were really confident that oil would double in price soon, I can see where you might want to store it.

Think about it this way- if you were told that it would cost more than half the value of your coin collection per year to insure it, wouldn't you be so insulted that you'd seriously consider other alternatives?

And why not protect yourself with options (puts and calls) instead of messing with expensive storage charges?

And that is why the price of oil continues to drop. No one can absorb it, yet they continue to literally pump it out of the ground. (At least until the supply line is literally filled, which apparently hasn't completely happened yet. The people that made a bet on filling up the tankers are screwed. But there is no place to off-load the oil, because the land-based tanks are also essentially full. I'm sure they are looking at filling up underground natural storage, even with the leakage loss and unrecoverable remnant that results from that option.

Here's an 18 month old view of that

https://rbnenergy.com/saving-all-my-cru ... in-houston