NY Harbor Shrinkage
When most people think about shrinkage, they think about George Costanza in the pool. However, there is a very serious shrinkage situation happening in the world of storage. Under the shadow of the lights of Yankee Stadium, slowly but surely, the amount of petroleum storage capacity that serves the NYMEX has been shrinking and the trend has not been your friend. How will gasoline and diesel for physical delivery into the NYMEX take place if storage is limited? Good question. For those companies who own tank storage in New York Harbor – happiness comes from wanting what you have, not from having what you want. For those companies seeking to lease storage in New York Harbor – be afraid….be very afraid. The Tank Tiger has been watching this situation very closely and if you’re interested in seeing our consulting report on this topic, let us know.
As we enter the month of June, one thing that definitely is not shrinking are the predictions for the number of hurricanes this season. The states of Florida, North Carolina, Texas, Louisiana and Georgia are more likely than not to be impacted by a hurricane in the next 4 months. In fact, some hurricane researchers make the case in a new study that it may be necessary to add a Category 6 for hurricane intensity. What would a category 6 hurricane be like? Well, if you were in its path and you were one of the 3 Stooges, you’d be running away and yelping Nyaaa-aaa-aaah! NOAA last month issued its highest-ever pre-season forecast, predicting that between 17 and 25 named storms will form (the average is 14), and 8 to 13 will become hurricanes with winds of at least 74 mph (the average is 7). Out of those 8 to 13, 4 to 7 could become major, with winds of at least 115 mph (the average is 3). Of course, no one will pay any attention to any of this until we see one barreling up the coast or boiling in the Gulf. On the topic of the Gulf, do you know we just listed a terminal for sale in Houston? If you want to know more about it, let us know.
Speaking of boiling, the stock market continues to heat up, finishing higher once again for last week, with an unexpectedly strong labor report to boot. The economy is almost too strong for its own good, and you can’t blame El Nino for it. Before the opening bell tomorrow, the market gets the May CPI figures. Don’t worry, it will come in at 0.3% on the month-over-month increase in the core inflation rate and no one will quite know what to do with that figure. The dollar did get stronger on all of that labor news thus throwing cold water on the OPEC+ attempts to prop up oil prices. Brent crude prices went below $80/barrel for the first time this year and WTI is paying rent in the mid-70’s. With supply concerns dwindling, the heating oil/diesel contango is locked in through Christmas and although NYH storage may be tough to find these days, The Tank Tiger has some deepwater storage to show you elsewhere. So don’t get caught watching the paint dry as the Celtics rain threes down on the Mavs.
