Best Oil Tanker Stocks to Profit from Crude Oil Storage Shortage (TNP, TNK, STNG, NAT)

Описание: This past week for the first time in history, the price of U.S. oil closed at a negative price. On Tuesday, the price of oil was an astonishing negative $37.63 per barrel. But that doesn’t mean that gas stations are going to be paying you to fill up. So make sure you take your wallet with you to the gas station. Also on Tuesday, savvy investors on Robinhood and Sofi Invest were buying large amounts of the United States Oil Fund ETF, USO, in an effort to cash in. But is this a good strategy? Is USO the best way to make money as the price of oil rebounds? Or are there alternative investment strategies that are much more profitable. In this video I talk about some alternative oil stocks you can buy that have massively outperformed USO over the last couple of months. So which oil related stocks do I recommend? Before we can discuss investment strategies, we need to understand what is going on. So, how did we get to negative oil prices? The easiest way to explain it all is by looking at it from a perspective of cause and effects events. The primary cause of low oil prices stems from a lack of demand due to the coronavirus pandemic. Global oil demand has fallen by about 30% as fewer people are traveling right now. The supply of oi has stayed the same while the demand has dropped significantly. Therefore the simple solution would be to stop producing extra oil. However, shutting down oil wells is not an easy thing to do. The process of shutting down an oil well is called a shut in and it can cause damage to the oil reservoirs and it can also permanently reduce oil output once the well is started back up. So obviously this is something that oil producers want to avoid. And the effect of oil producers refusing to decrease production means that the extra oil has to be stored somewhere. But since oil is a toxic, volatile compound, it has to be stored in a special way and there is only a limited amount of oil storage available in the U.S. What happened on Tuesday was that the storage facilities for oil became completely full. That meant that oil producers had nowhere to store their extra oil and that they had to pay oil storage companies to store their oil for them. To better understand the oil storage shortage, we have to understand something about the Oil markets and that is that they are priced based on location. For U.S oil the benchmark is WTI crude oil which stands for West Texas Intermediate. An overwhelming majority of WTI crude oil is delivered to Cushing, Oklahoma which is a landlocked state that is 500 miles from the ocean. The significance of this is that once the storage at Cushing is full, the oil must be stored somewhere else and right now most of it is being stored in oil tankers off the coast of California, Texas, and Florida. However, normally this does not need to be done since there is plenty of storage space in Cushing for WTI crude oil. The hub in Cushing features the greatest amount of commercial oil storage in the U.S., with an estimated ability to store 76.1 million barrels of oil. But because of the massive oversupply of oil, Cushing became completely full this past week. And when this happened there were no longer any buyers for the oil. This meant that oil traders had to frantically search for other storage options In fact, oil traders and producers are so desperate to find storage for their excess oil right now that they are paying upwards of $350,000 a day for massive oil tankers to hold their excess oil in hopes that they can sell it to refineries later in the year for a profit. And this presents some interesting investment opportunities for people who understand that this is happening. Theoretically if you had a storage container in Cushing, Oklahoma that could store 100,000 barrels of oil, you could have made $3.7 Million dollars because oil traders and producers would have had no other option but to pay you to store their oil for them. Unfortunately, most people do not have the ability to buy and store oil so this option is off the table. But a great way to profit off of negative oil is to buy shares of oil tanker companies. Companies such as Nordic American Tankers, Scorpio Tankers, and Teekay Tankers are all up over 100% on average since late February and March. And with no end in sight to the coronavirus pandemic, there is reason to believe that these companies could go even higher over the next couple of months. That being said, once the demand for oil stabilizes. The shares of the oil tanker companies will probably drop so this is probably best used as a short term investment strategy over the next couple of months.