HOUSTON — Such is the state of the oil industry these days that there is sometimes nowhere to put the oil.
Off the coast of Texas, a line of roughly 40 tankers has formed,
waiting to unload their crude or, in some cases, for a willing buyer to
come along. Similar scenes are playing out off the coasts of Singapore
and China and in the Persian Gulf.
There is little sign that the logjam will ease, as the price of oil continued its yearlong plunge this week, declining by nearly $10 a barrel.
The
renewed collapse in crude prices is helping to again drive down
gasoline prices for American drivers, to a national average of $2.19 a
gallon for regular gasoline on Friday, according to the AAA motor club.
That is 9 cents below the price a month ago and 73 cents below the price
a year ago.
The
slide in oil companies’ fortunes has been significant because of
expanded production in Russia, Saudi Arabia and other Persian Gulf
states, as well as a slowdown in demand growth in China and the
expectation by commodity traders that the Iran nuclear deal will
introduce large quantities of oil to the glutted market.
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Something Very Strange Is Taking Place Off The Coast Of Galveston, TX
Submitted by Tyler Durden on 11/12/2015 21:43 -0500
Having exposed the world yesterday to the 2-mile long line of tankers-full'o'crude heading from Iraq to the US, several weeks after reporting that China has run out of oil storage space
we can now confirm that the global crude "in transit" glut is becoming
gargantuan and is starting to have adverse consequences on the price of
oil.
While the crude oil tanker backlog in Houston reaches an almost unprecedented 39 (with combined capacity of 28.4 million barrels), as The FT reports that from China to the Gulf of Mexico, the growing flotilla of stationary supertankers is evidence that the oil price crash may still have further to run, as more than 100m barrels of crude oil and heavy fuels are being held on ships at sea (as the year-long supply glut fills up available storage on land). The storage problems are so severe in fact, that traders asking ships to go slow, and that is where we see something very strange occurring off the coast near Galveston, TX.
Read More Here
While the crude oil tanker backlog in Houston reaches an almost unprecedented 39 (with combined capacity of 28.4 million barrels), as The FT reports that from China to the Gulf of Mexico, the growing flotilla of stationary supertankers is evidence that the oil price crash may still have further to run, as more than 100m barrels of crude oil and heavy fuels are being held on ships at sea (as the year-long supply glut fills up available storage on land). The storage problems are so severe in fact, that traders asking ships to go slow, and that is where we see something very strange occurring off the coast near Galveston, TX.
FT reports that "the
amount of oil at sea is at least double the levels of earlier this year
and is equivalent to more than a day of global oil supply. The numbers
of vessels has been compiled by the Financial Times from satellite
tracking data and industry sources."
The storage glut is unprecedented:
Off Indonesia, Malaysia and Singapore, Asia’s main oil hub, around 35m barrels of crude and shipping fuel are being stored on 14 VLCCs.“A lot of the storage off Singapore is fuel oil as the contango is stronger,” said Petromatrix analyst Olivier Jakob. Fuel oil is mainly used in shipping and power generation.Off China, which is on course to overtake the US as the world’s largest crude importer, five heavily laden VLCCs — each capable of carrying more than 2m barrels of oil — are parked near the ports of Qingdao, Dalian and Tianjin.In Europe, a number of smaller tankers are facing short-term delays at Rotterdam and in the North Sea, where output is near a two-year high. In the Mediterranean a VLCC has been parked off Malta since September.
Read More Here
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