While tank storage will always remain an integral part of the supply chain, the long-term growth of the industry in Europe remains uncertain, writes Ellen Ruhotas
Where oil producers have been sweating on oil price fluctuations, storage terminal operators have been rubbing their hands. The market contango and the record oil surpluses has resulted in strong demand for storage tanks in the European region. Like all good things though, they don’t last forever. Changes in market demand for refined products, pressures from environmental mandates and fundamental changes in global production centers all cast a shadow on the future of growth in European bulk liquid storage.
HAVE WE FINISHED DANCING THE CONTANGO?
Since mid-2014, the forward price for crude oil and refined products has been higher than the current price. This contango position in the market incentivises traders to buy product at the cheaper price and store for sale at some future time, at a higher price. In these market conditi...