Share Demand for storage is reaching a fever pitch with tank capacity and utilization at all-time highs, but the storage market is volatile and at the same time could be barreling toward oversupply. The US crude market is in contango, meaning crude is worth less for delivery now than later. That dynamic encourages storage, but it could reverse as the contango narrows and production shrinks while tank capacity continues to expand. There is an easy comparison between the take-or-pay contracts on pipelines and storage tanks, which might give a hint of things to come if the market structure reverses. Under both kinds of contracts, the counterparty has to either use the committed space on the asset or pay a penalty, often as much as the price to use the space in the first place. In the case of pipelines, that pushed Midland WTI into a premium over its counterpart […]