Mixed results for global independent storage
Business trends in independent oil storage have diverged geographically, with profits led by terminals serving the long-distance trade in refined products
Trends in the oil market recently have not been kind to the independent storage operators. Oil use in the US and Europe has been declining, so smaller volumes need to be moved and stored. Meanwhile, refined product prices have predominantly been in backwardation – futures prices lower than prompt – so there is little incentive for speculative storage. The first trend has cut the logistical call on independent storage capacity and the second has cut the trading call. But the good news is that the long-distance supply of refined products is increasing, and is seen as a structural feature of the business. The new super-refineries of Asia and other advantaged refineries – such as those on the US
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