How to Make Big Money in a Short Time!

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It always intrigues me to learn how easy it is to make money, in this case, without substantial risk, in the trading world if you only had the “tools” to do it. This morning I read that three trading companies have chartered four crude oil carriers off Singapore and locked in short term trades to make, what I consider big money.

Traders Charter VLCC’s for Crude Storage

The receipt for doing so are the following:

  • The spot market for VLCC crude oil carriers has dropped recently from $47,500 per day a year ago to about $27-33,000 per day today
  • With the British EU exit vote, Brent crude dropped to about $48/bbl
  • The forward curve shows a Brent price of about $52/bbl in the next few months
  • The traders chartered the carriers for a month with an option to extend
  • The traders will use their bank credit to purchase the cargos of crude

Details of the four crude carriers are shown below. The total crude oil volume of the transaction is about 6,359,256 barrels.

big money

And the transaction, assuming Brent price for both purchase and sale, shows a profit of $21 million on essentially no investment – only creditworthiness!

big money 2

So all you need is creditworthiness, know-how and be watching both the spot market for carrier rates and physical and futures market prices for crude and then wait for the perfect timing. Of course, if the spot market rate for carriers has dropped so much in a year and the forward curve shows higher price for crude it must mean that worldwide inventories are dropping and this “special timing” opportunity may repeat itself often in the coming months. Are you ready to do the next deal?!

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David Donohue

Dr. David A. T. Donohue is the Founder and President of both IHRDC and Arlington Storage Corporation. Dr. Donohue is a technical specialist, businessman, attorney, and lecturer who is highly regarded for the teaching of management programs devoted to the business of oil and gas. He has successfully designed and taught these “business game” programs to more than 10,000 members of the international oil and gas industry on both in-house and public bases. He was the developer of an innovative video-based learning system for the upstream petroleum industry, which has now been converted to IPIMS, a widely licensed e-Learning system. Dr. Donohue is also the developer and owner of independent underground gas storage facilities in New York State. In his early career he held various positions in engineering and research for Exxon and, for four years, served on the faculty of Pennsylvania State University. Dr. Donohue holds a Ph.D. in Petroleum and Natural Gas Engineering from Pennsylvania State University and a J.D. from Boston College Law School. He is active in public affairs in his hometown, a Distinguished Member of the SPE, and Alumni Fellow of Pennsylvania State University.

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