Frontline

Here is some interesting news about oil tankers, contango arbitrage, and Frontline from Reggie Middleton on Seeking Alpha.

Key data is that Frontline has already leased 20-25 tankers for oil storage, and arbitrageurs are seeking 5-10 more. What did I tell you?

The amounts of oil being put into storage are going to reach ridiculous, historical proportions. It's so silly. Is the oil really worth that much more out of the ground? No, but there is a vast ocean between current prices and future prices, which have a mid-year recovery priced in. Recovery or not, the amount of oil in storage will depress future prices either way. I see oil at $30 some time this year. Long term prices have a long way to fall.