While crude oil remains mired near 5 1/2-year lows, oil tanker stocks have been on a tear. 
 
 Early into 2015, Nordic American Tankers Ltd. and Teekay Tankers Ltd. are both up double digits, with Frontline Ltd.’s 30-per-cent advance far outpacing its peers. 
 
 That’s because there is now demand for massive tankers not to ship oil across the ocean, but just to sit there, fully loaded, to sell the product for a higher price in the future. 
 
 Arlene Boon, whose grandfather bought the family property along the Peace River outside of Fort St. John, and her husband Ken walk along their property on Jan. 16, 2013. The Globe and Mail Multimedia Eleven B.C. resource projects and the court actions they’ve inspired, in detail 
 
 The market dynamic underpinning this development is contango, a market structure in which the futures price of a commodity, in this case, oil, is higher than the current spot price. The price of a barrel of West Texas intermediate remains below $50 (U.S.), but the 12-month futures contract allows sellers to realize a price close to $56 a barrel next year. 
 
 Reuters reports energy trading firms have begun to reserve oil tankers to take advantage of this opportunity. Daily rates charged by tanker companies have soared, but these aren’t an accurate depiction of the revenues the firms will generate from these deals. Because of the length of these contracts and the preference for storing it on older vessels, trading firms are able to book tankers at a considerable discount. 
 
 This “floating storage” was last in vogue in 2009, after oil prices had collapsed spectacularly and the global economy was mired in a recession. As the global economy recovered, however, shipping companies were in for a crude awakening: A growing U.S. economy didn’t spur a pick-up in demand for oil shipments from the Middle East, as the shale revolution and an increase in production from the Canadian oil sands displaced these imports. 
 
 And as Izabella Kaminska of FT Alphaville has noted, the economics of oil storage have changed dramatically thanks to this shale boom. A new play in the Eagle Ford region of Texas, for instance, is able to bring oil to the market far faster than, say, a new mine in Alberta, and has a much shorter life-cycle. If the futures price one to two years out can provide a positive return for a shale producer, it will be able to lock in that selling price and stands a fair chance of securing financing. As such, a contango structure that incentivizes storage can also serve as a boon to shale producers, and the two will be in competition for capital. 
 
 “In short, because the industry can bring new supply to market relatively quickly, we go from a spare capacity model, to a just-in-time model instead,” Ms. Kaminska writes. 
 
 Jeffrey Currie, head of commodities research at Goldman Sachs, suggests that the 12-month futures price must remain below $65 a barrel – his estimate for the marginal cost of production for shale producers – to meaningfully deter investment. But it’s no longer necessary to load ever-increasing amounts of oil onto tankers to protect against a shortage, because the responsiveness of shale production will keep such a market imbalance from persisting for a long period of time. 
 
 Fortunately for tanker companies, the current contango structure is a Goldilocks scenario: The one- to two-year future prices are low enough to discourage investment in shale, but high enough that trading firms are able to generate a return through storing oil on their vessels. 
 
 But in this industry, a favourable backdrop has fostered overoptimistic expectations of success down the road, with malinvestment leading to significant excess capacity that has long weighed on the daily rates companies are able to charge, increased indebtedness and dividend volatility. Frontline, the current darling in the space, had to issue 760,377 shares in late December to placate its creditors, a payment for its past sins. 
 
 This propensity for mismanagement is also what worries analysts about airlines: that they’ll show a lack of discipline in response to a massive decline in the price of their biggest operating expense. 
 
 These industries are seemingly among the biggest winners from the low-oil environment, but investors would do well to approach with caution. In both, there are few examples of sustainable success stories one can turn to: These are risky, short-term trades, and worth avoiding for those who wish to sleep soundly at night. 
 
 Report Typo/Error ||||| China National Offshore Oil Corporation's (CNOOC) oil rig in China's Bohai Sea is seen in this October 21, 2003 file photo. 
 
 NEW YORK/WASHINGTON (Reuters) - The day after bringing its biggest case of oil market manipulation ever, a U.S. regulator warned those trying to rig the commodities markets that they will be hunted down. 
 
 "We're watching and we'll come and get you," warned Bart Chilton, a commissioner for the U.S. Commodity Futures Trading Commission. 
 
 Chilton's comments came after Arcadia, one of two firms sued on Tuesday for allegedly reaping $50 million by illegally manipulating oil markets in 2008, pledged to fight the CFTC. 
 
 "The CFTC is wrong on both the facts and the law," Colin Hurley, the Chief Financial Officer of Arcadia, said in an e-mailed statement. 
 
 The quick rebuttal set up a rare public show-down over trading practices in the opaque physical oil market. Many such past cases have been settled out of court, and regulators have struggled in the past to make manipulation charges stick. 
 
 The CFTC suit against London-based Arcadia and U.S. subsidiary Parnon Energy, as well as two well-known traders James Dyer and Nick Wildgoose, suggests a tougher approach from regulators under political pressure to crack down on market malfeasance. 
 
 Alleged manipulation of oil markets has become a charged political topic. The Obama administration has assured Americans it is trying to curb high U.S. gasoline prices and ensure they aren't being artificially driven up. 
 
 "This is only going to be the beginning of an array of cases that will be brought and I believe it's going to have a deterrent on market actors as we speak," said Michael Greenberger, a law professor at the University of Maryland and the CFTC's former director of trading and markets. 
 
 SQUEEZE PLAY? 
 
 Arcadia and Parnon are both owned by secretive Norwegian billionaire John Fredriksen. Known as "Big Wolf" and more widely as "Big John" in the shipping industry, he owns the world's largest independent oil tanker firm, Frontline. 
 
 The CFTC suit alleges that Dyer and Wildgoose carried out an illegal squeeze in benchmark U.S. West Texas Intermediate (WTI) oil markets in early 2008 that led to $50 million in illicit profits. 
 
 The CFTC said the traders amassed large physical positions at a key U.S. trading hub in Cushing, Oklahoma to create the impression of tight supplies that would boost prompt oil prices. 
 
 Later, they dumped those barrels back onto the market, causing prices to fall and racking up profits from short positions they had accrued in futures markets, the suit said. 
 
 Parnon owns at least 3 million barrels of storage facilities at Cushing, the delivery point of the U.S. crude contract. 
 
 London-based Arcadia, whose headquarters sit opposite the iconic department store Harrods, is a major global oil trading firm, which typically markets about 800,000 barrels a day of crude and oil products around the world. 
 
 Hurley disputed the notion that Arcadia had a big enough position to influence the U.S. crude oil futures market, which had a notional daily turnover of $300 to $400 million in early 2008. 
 
 He said independent experts it had retained agreed that "the CFTC's allegations of misconduct were inconsistent with market conditions and with Arcadia's trading activity during the period." 
 
 Many civil actions around the derivatives markets have been settled before reaching trial, with firms often agreeing to pay fines without admitting wrongdoing. In this case, Arcadia said it did not expect a settlement to be possible. 
 
 "In short, our activity involved legitimate and lawful trades at market prices that were dictated by the fundamentals of supply and demand," Hurley, who also speaks for Parnon, said. "We look forward to proving this in court." 
 
 NEW POWERS 
 
 The CFTC launched a probe of crude oil markets in 2008 when prices surged to a record $147 a barrel, then crashed to nearly $30 a barrel by the end of the year. 
 
 Chilton would not say whether the latest case, brought in the Federal Southern District Court of New York, was a harbinger of more to come, but said the agency hasn't announced the end of its investigation into market manipulation in 2008. 
 
 "I hope this sends a resounding message to whoever may consider manipulating or attempting to manipulate the futures markets," said Chilton. 
 
 "Quite frankly, I wish we had gone more rapidly but investigations take time," said Chilton. 
 
 While this case came under its existing authority, the CFTC is gearing up to test its increased powers under the Dodd-Frank Act to prevent market manipulation and disruptive trading practices. Effective in July, the law could end decades of confusion and a failure to prosecute traders. 
 
 The CFTC had previously focused mostly on smaller retail foreign exchange fraud and Ponzi rackets because regulations made it hard to prove market manipulation, according to officials who follow the agency. 
 
 The CFTC will now only have to show a trader acted in a manner that had the potential to disrupt the market, making it easier to prove a case. Currently, the regulator has to show an intent to manipulate prices. 
 
 The CFTC also recently welcomed a new enforcement chief, David Meister, who has vowed to use his "bigger arsenal of weapons" to target more cutting-edge, high impact schemes. 
 
 (Additional reporting by Joshua Schneyer and Andrew Longstreth in New York City; Tim Gardner and Charles Abbott in Washington; Jonathan Saul and Simon Falush in London and Terje Solsvik in Oslo; Editing by Alden Bentley, Lisa Shumaker and Matthew Robinson)
– Commodity brokers call it a "contango"—a situation where the current price of a commodity is lower than prices for future delivery—and it could make a lot of money for traders who can find somewhere to store huge amounts of oil. The recent plunge in oil prices has caused a scramble for storage space, and traders are increasingly turning to offshore supertankers for storage as sites on land fill up, reports the Wall Street Journal. Analysts say that major traders have now chartered tankers capable of holding more than 30 million barrels of oil, and they're expected to remain anchored for around a year. Floating storage carried more than 70 million barrels of oil after the oil price collapsed in 2009, although the Globe and Mail notes that some traders were in for a "crude awakening" after a surge in US shale output meant consumption from the Middle East didn't rise when the economy recovered. "If people think the contango is some kind of magical way to make money, they are incorrect," an analyst at Mercuria Energy Group tells the Journal. "Storing big quantities of crude oil is not an easy game. It's not a game at all."