Latest Blog: Fireside Reading - 03/30/2023
- BACK TO CIO INSIGHTS BACK TO ARTICLES & INSIGHTS HOME
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
The following item caught my eye on Bloomberg:Los Angeles City Employees' Retirement System is scheduled to discuss a ...READ BLOG POST
More on Rates... 06-26-2015
A few days ago (Beginning's End) I suggested 2015 might turn out to be the worst year for bond investors in the past ...READ BLOG POST
Mark Twain wrote in his autobiography that there are three kinds of lies: lies, damned lies and statistics. How ...READ BLOG POST
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.
429 SANTA MONICA BLVD,
SANTA MONICA, CA 90401
375 PARK AVENUE,
NEW YORK, NY 10152
400 N. MICHIGAN AVE,
CHICAGO, IL 60611
5151 SAN FELIPE ST,
HOUSTON, TX 77056
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