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Oil Traders See Glimmer of Profit in Hoarding Crude at Sea

  • Brent’s 6-month contango now more than covers freight cost
  • Front-month oil futures, ship costs have slumped amid glut

Oil traders once again believe it’s worth heading out to sea.

The market structure for Brent crude, the benchmark for more than half the world’s oil, now makes it viable to store supplies in a ship to potentially lock in profits on a sale six months later, according to a Bloomberg survey of 6 traders and analysts. In August, cargoes for later delivery have averaged $2.78 a barrel higher than prompt shipments, more than covering the cost to hire a tanker for storage for half a year.