[Crude oil price minus]Aim to be a “legendary speculator”


There was a rare event in the US where the price of crude oil futures goes negative because the economic activity has stagnated under the influence of the new coronavirus, and the buyer of surplus crude oil is no longer available.

Affiliated companies began to use huge offshore tankers as storage so that the storage space on the ground to store the surplus became scarce.

What the market officials recalled was the existence of a “legendary speculator” who borrowed a tanker and sold it when the market price rose to build a huge fortune.

On the 20th of April, the US standard oil species (WTI), which served as an index, had a negative price in the New York crude oil futures market.

The price went down for the first time since 1983, when the product went public, ending the deal at $ 37.63 per barrel, which was $ 55.90 lower than last weekend so that WTI’s May delivery at New York crude oil futures market accelerated sell order from the morning.

It is an abnormal situation in which the seller pays for the crude oil.

n the United States, restrictions on going out to prevent infectious diseases have spread, and the opportunities for using aircraft and automobiles have dramatically decreased. Demand has fallen faster than market participants expected, however, it is said that the company’s supply cut cannot keep up with the decrease in demand.

“OPEC Plus,” which is a member or non-member of the Organization for Petroleum Exporting Countries (OPEC), has agreed to cut production by 9.7 million barrels a day from May to June, but there is little view that the amount of production has been reduced to meet the tapering demand. It has been pointed out that the crude oil market will continue to be oversupplied for the time being, putting downward pressure on the market.

Lease prices for huge tankers called “super tankers” are also rising. This is because the storage space on the ground is expected to bottom out, and a related company that intends to use a tanker floating on the sea as a storage is going to borrow a tanker.

According to the Wall Street Journal, the monthly contract fee for leasing a so-called “VLCC” tanker for six months was $ 100,000, three times higher than a year ago. It is a good idea to keep the crude oil procured when the market is sluggish, sell it when the price rises, and make a profit. Speculators expect the economy to recover after the end of the new corona, and demand for crude oil will rise. The tanker, which is equipped with crude oil and waits for “at the time of sale,” is said to be anchored off South Africa, which is easy to reach destinations such as Asia, Europe, and the United States.

The paper introduced that the method of making a big profit by using a huge tanker instead of a storehouse was devised by Andy Hall, who is known in the industry as “legendary trader”.

During the Gulf crisis from Iraq’s invasion of Kuwait to the Gulf War in 1990-91, Mr. Hall stored cheap crude oil procured before the crisis in tankers and sold it at a high price to build a huge wealth. At the time, he was in the oil trading arm of the Solomon Brothers, and said he received a huge bonus and “purchased an old German castle.”

Following the success of Mr. Hall, speculation sources are trying to find a “second dojo”, and the crude oil market at the moment is deeply confused. Unlike the Gulf War, the United States became the world’s top oil producer and China became the world’s second-largest consumer. Mr. Hall, who has succeeded based on an analysis of the international affairs, has taken the dynamics of the world market into account. How do you read it?