Market News & Analysis
Oil Storage, the Crude Reality?
Jason Lubin April 21, 2020 2:48 PM
Oil is the backbone of today's global economy and is used in the life cycle of almost every product. As a society we rely to heavily on oil to cut production by a significant amount, and in some countries economies depend largely on the energy sector, including a few OPEC members. With the idea that oil will be building up until demand returns, there may be a way to take advantage of growing oil reserves. Once land based storage facilities fill up, the next method would most likely be storing the oil on a marine vessel until delivery.
Scorpio Tankers Inc. (STNG) is an energy marine transport company based in the Republic of the Marshall Islands. The company's market capitalization is 1.3 billion dollars. Looking at a daily chart, the RSI is above its neutrality area at 65. Price is above both the 20 day and 50 day moving average. Price recently broke out of a 3 month downtrend and entered an uptrend based on its market structure of higher highs and higher lows. Price could continue upwards to test $24.80 or possibly retrace back to about $20.08. In the event of a pullback, if price were to bounce at roughly $20.08, it would confirm the breakout. If price drops below $20.08, it may be headed back down to $16.61. The company is set to report first quarter earnings on May 1st.
Source: GAIN Capital, TradingView
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.