Oil Storage the Crude Reality
Is the lack of oil demand going to help marine storage facilities?
Share this:
The travel bans and national lockdowns caused a massive demand shock to the energy sector as a result of the COVID-19 pandemic. According to the EIA, in the first quarter (January 1st to March 31st) of 2020 roughly 94.4 million barrels of oil were used per day, which means that approximately $1.9 billion dollars worth of oil was used per day at an average of $20.00 per barrel.
Oil is the backbone of today's global economy and is used in the life cycle of almost every product. As a society we rely to heavily on oil to cut production by a significant amount, and in some countries economies depend largely on the energy sector, including a few OPEC members. With the idea that oil will be building up until demand returns, there may be a way to take advantage of growing oil reserves. Once land based storage facilities fill up, the next method would most likely be storing the oil on a marine vessel until delivery.
Scorpio Tankers Inc. (STNG) is an energy marine transport company based in the Republic of the Marshall Islands. The company's market capitalization is 1.3 billion dollars. Looking at a daily chart, the RSI is above its neutrality area at 65. Price is above both the 20 day and 50 day moving average. Price recently broke out of a 3 month downtrend and entered an uptrend based on its market structure of higher highs and higher lows. Price could continue upwards to test $24.80 or possibly retrace back to about $20.08. In the event of a pullback, if price were to bounce at roughly $20.08, it would confirm the breakout. If price drops below $20.08, it may be headed back down to $16.61. The company is set to report first quarter earnings on May 1st.
Oil is the backbone of today's global economy and is used in the life cycle of almost every product. As a society we rely to heavily on oil to cut production by a significant amount, and in some countries economies depend largely on the energy sector, including a few OPEC members. With the idea that oil will be building up until demand returns, there may be a way to take advantage of growing oil reserves. Once land based storage facilities fill up, the next method would most likely be storing the oil on a marine vessel until delivery.
Scorpio Tankers Inc. (STNG) is an energy marine transport company based in the Republic of the Marshall Islands. The company's market capitalization is 1.3 billion dollars. Looking at a daily chart, the RSI is above its neutrality area at 65. Price is above both the 20 day and 50 day moving average. Price recently broke out of a 3 month downtrend and entered an uptrend based on its market structure of higher highs and higher lows. Price could continue upwards to test $24.80 or possibly retrace back to about $20.08. In the event of a pullback, if price were to bounce at roughly $20.08, it would confirm the breakout. If price drops below $20.08, it may be headed back down to $16.61. The company is set to report first quarter earnings on May 1st.
Source: GAIN Capital, TradingView
The travel bans and national lockdowns caused a massive demand shock to the energy sector as a result of the COVID-19 pandemic. According to the EIA, in the first quarter (January 1st to March 31st) of 2020 roughly 94.4 million barrels of oil were used per day, which means that approximately $1.9 billion dollars worth of oil was used per day at an average of $20.00 per barrel.
Oil is the backbone of today's global economy and is used in the life cycle of almost every product. As a society we rely to heavily on oil to cut production by a significant amount, and in some countries economies depend largely on the energy sector, including a few OPEC members. With the idea that oil will be building up until demand returns, there may be a way to take advantage of growing oil reserves. Once land based storage facilities fill up, the next method would most likely be storing the oil on a marine vessel until delivery.
Scorpio Tankers Inc. (STNG) is an energy marine transport company based in the Republic of the Marshall Islands. The company's market capitalization is 1.3 billion dollars. Looking at a daily chart, the RSI is above its neutrality area at 65. Price is above both the 20 day and 50 day moving average. Price recently broke out of a 3 month downtrend and entered an uptrend based on its market structure of higher highs and higher lows. Price could continue upwards to test $24.80 or possibly retrace back to about $20.08. In the event of a pullback, if price were to bounce at roughly $20.08, it would confirm the breakout. If price drops below $20.08, it may be headed back down to $16.61. The company is set to report first quarter earnings on May 1st.
Oil is the backbone of today's global economy and is used in the life cycle of almost every product. As a society we rely to heavily on oil to cut production by a significant amount, and in some countries economies depend largely on the energy sector, including a few OPEC members. With the idea that oil will be building up until demand returns, there may be a way to take advantage of growing oil reserves. Once land based storage facilities fill up, the next method would most likely be storing the oil on a marine vessel until delivery.
Scorpio Tankers Inc. (STNG) is an energy marine transport company based in the Republic of the Marshall Islands. The company's market capitalization is 1.3 billion dollars. Looking at a daily chart, the RSI is above its neutrality area at 65. Price is above both the 20 day and 50 day moving average. Price recently broke out of a 3 month downtrend and entered an uptrend based on its market structure of higher highs and higher lows. Price could continue upwards to test $24.80 or possibly retrace back to about $20.08. In the event of a pullback, if price were to bounce at roughly $20.08, it would confirm the breakout. If price drops below $20.08, it may be headed back down to $16.61. The company is set to report first quarter earnings on May 1st.
Source: GAIN Capital, TradingView
Latest market news
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Crude Oil Analysis: Geopolitical Risk Continues to Drive the WTI Barrel Higher
During recent trading sessions, a new wave of buying momentum has continued to gain relevance around WTI crude oil price action. Over the last three trading sessions, the market has maintained a bullish streak and is now up more than 5.5%, highlighting significant buying pressure in the short term.
Crude Oil Forecast WTI Prices Come Under Pressure as Middle East Risks Ease
Over the last two trading sessions, WTI crude oil has once again displayed a notable bearish bias, with prices falling nearly 6%. Part of this renewed selling pressure has been driven by recent developments in the Middle East, which have helped temporarily ease the geopolitical tensions that had supported the oil risk premium in previous weeks.
Crude Oil Analysis WTI barrel remains weak after OPEC+ announcements
Crude oil continues to face difficult trading sessions in the short term. Over the last 5 trading sessions on average, WTI remains down close to -3.5%, with consistent movements below the 70-dollar area. This continues to highlight a selling bias that has remained in place for several weeks.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.