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Fujairah, the UAE emirate that is strategically located outside the Strait of Hormuz, is poised to benefit from the growing appetite of oil market players to store crude oil and products in a contango market. Storage companies in Fujairah are planning to nearly double capacity by 2020.
The contango market, where prompt prices are lower than prices for delivery further in the future, is driving investment in the sector and has already seen a surge in US oil stocks to historic highs.
Fujairah tank storage capacity is expected to rise to around 8mn m³ by end-2014 and to 14mn m³ by 2020, UAE newspaper, The National, quoted UAE officials as saying at a conference in Fujairah. Capacity was 5mn m³ at end-2012. (CONTINUED - 1035 WORDS)