Curious about a mid-term and long-term outlook of the ARA tank storage sector? Download your copy of Patrick Kulsen’s view on the outlook of the ARA TT market that he presented during Platt’s 9th European Oil Storage Conference in Amsterdam. Just fill in your contact-details below.
Main themes that are currently driving TT dynamics
As from 3Q14 crude oil prices fell from an average price per barrel of $100/bbl to a price range of $30-60/bbl in 1Q15 and onwards. During that oil price regime switch, another phenomenon occured and that was the change of the shape of the forward curve from backwardation to contango which represents anticipated oversupply.
Lower crude prices resulted in an improvement of the region’s refinery sector’s margins. This boosted production and led to more Northwest European refinery output. Product inventories in the region rose as applied for regional imbalances. These factors (growing production, increasing demand and larger regional imbalances) resulted in more trading and thus more demand for tank storage capacity.
The shape of oil products forward curve stimulated so called ‘contango storage plays‘ which handed market players opportunities to profit from storing oil products now and deliver in a later stage. This market situation acted as catalyst to store oil products. More demand for tank storage capacity supported tank storage rates in the region.
PJK International has revised its yearly outlook on the ARA tank terminal sector. In this edition, also a medium and long term outlook are presented. Interested in purchasing this report, follow this link or call us (+31-76-7676326).