Latest Blog: Yellow Flag - 05/10/2022
Investment Insights are written by Angeles' CIO Michael Rosen
Michael has more than 30 years experience as an institutional portfolio manager, investment strategist, trader and academic.
FLOATING OILPublished: 05-24-2016
Oil has had a nice recovery this year (see graph for Brent, YTD), up about 18% to over $48/barrel today. Of course, this is still well below the +$100/barrel we saw from 2011 through most of 2014, so will oil continue its climb higher?
Um….no. I don’t see any oil tankers in Santa Monica Bay today, but if I looked out my window in Singapore, it would be a very different story. Through the Straits of Malacca, between Malaysia and Indonesia, one of the most strategically important shipping lanes in the world, flows more than 15 million barrels of oil every day, about 27% of the entire world oil maritime trade. Today, there are 40 supertankers anchored offshore Singapore (see map below), each holding more than one million barrels of oil. The Straits are more congested than the 405 at 5pm.
A few months ago, traders earned a positive arbitrage by storing oil in these tankers and selling later as the price jumped. But today that arbitrage is negative, anywhere from $0.48 per barrel for 30 days to more than $6 per barrel for 12 months. So this oil is not being stored for profit: we’ve run out of places to hold it.
The more oil that floats, the more the price will sink.PRINT THIS ARTICLE
Don't Blame Nature 05-22-2015
Commodity prices rise and fall; no great insight there. Which is why most of us, mostly, take the fluctuations in ...READ MORE
Beach Reading 08-11-2020
One of the upsides to confinement over the past few months is that I've been able to raise my reading capacity. Here ...READ MORE
Humans! What Are They Good For? 06-29-2017
It looks like the world is turning against humans. I've talked before about the rise of robots in manufacturing ...READ MORE
We strive build portfolios of best-in-class investment managers across all asset classes. If you would like to be considered for our portfolios, please contact us using our manager inquiries form.
- MANAGER INQUIRIES
SUBSCRIBE TO ANGELES' INSIGHTS
Get the latest investment information and stay on top of market trends.
How Can We Help You?Institutional Investors
Fully resourced investment office built to manage sophisticated client investment programsPrivate Wealth
Personalized discretionary portfolio and wealth management services powered by institutional processInvestment Management
Rigorous process and a flexible platform designed to meet client needsArticles & Insights
Latest insights and perspectives from the Angeles teamContact Us
Get in touch