Speculative crude oil trading with the use of VLCCS, the case of carry forward
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Subject
Πετρελαιοφόρα ; Ναύλωση και ναύλος ; Πετρέλαιο -- Βιομηχανία και εμπόριο -- Οικονομικές απόψειςAbstract
As usually occurs in organized markets of commodities which prices appear to be highly volatile, there are some periods when mispricing occurs at the pricing of Crude Oil’s Future Contracts. The occurrence of such distortions allows the possibility of making speculative transactions. When the Future Contracts of Crude Oil are priced higher than their fair value
then, speculative investors purchase Crude Oil at the spot market, resell it directly via Future Contracts and receive the profits that arise from the difference between the spot and the future price of Crude Oil. In order to enable this to happen, revenues must be enough to cover the actual cost of carry of Crude Oil, for the period between the initial purchase and the
settlement date of the Future Contract and, moreover, leave some space for profits. In their effort to maximize the profits from this procedure, speculators hire VLCC tanker ships to be used as floating storage rather than for trading.
Postgraduate Studies Programme
ΝαυτιλίαDepartment
Σχολή Ναυτιλίας και Βιομηχανίας. Τμήμα Ναυτιλιακών ΣπουδώνNumber of pages
79Language
EnglishCollections
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Αναφορά Δημιουργού-Μη Εμπορική Χρήση-Όχι Παράγωγα Έργα 4.0 Διεθνές
Αναφορά Δημιουργού-Μη Εμπορική Χρήση-Όχι Παράγωγα Έργα 4.0 Διεθνές