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A widening contango structure in oil prices, in which future crude costs are higher than near-term ones, may spur demand to store crude on tankers, said Fotis Giannakoulis, a Morgan Stanley analyst.
Brent crude futures for October cost about 33 cents a barrel more than first-month contracts, compared with a discount of about $2.44 in mid-May, according to ICE Futures Europe.
Storage at sea may rise if the current contango widens to about $1.30 a barrel, an amount that would cover the costs involved in hiring tankers, Giannakoulis said in a note.
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