{"id":54968,"date":"2020-09-10T14:22:20","date_gmt":"2020-09-10T19:22:20","guid":{"rendered":"https:\/\/olduvai.ca\/?p=54968"},"modified":"2020-09-10T14:22:20","modified_gmt":"2020-09-10T19:22:20","slug":"its-happening-again-traders-store-oil-at-sea-as-recovery-falters","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=54968","title":{"rendered":"“It’s Happening Again” – Traders Store Oil At Sea As Recovery Falters"},"content":{"rendered":"
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“It’s Happening Again” – Traders Store Oil At Sea As Recovery Falters<\/a>\u00a0<\/span><\/h3>\n<\/div>\n
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Crude prices slid\u00a0Thursday as the stalled global economic recovery from the virus pandemic triggers a “second wave” of demand fears and sparks renewed interest in floating storage as the\u00a0oil market flips bearish<\/a>.<\/p>\n

Reuters<\/a>\u00a0said\u00a0a “fresh build-up of global oil supplies, pushing traders including Trafigura to book tankers to store millions of barrels of crude oil and refined fuels at sea again.”<\/strong><\/em><\/p>\n

Floating storage, onboard crude tankers, comes as\u00a0traditional onshore storage nears capacity as supply outpaces demand.<\/p>\n

Total Oil Inventories\u00a0<\/strong><\/p>\n

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Refinitiv vessel data shows trading house\u00a0Trafigura has recently chartered at least\u00a0five crude tankers, each capable of\u00a02 million barrels of oil.<\/p>\n

The inventory build up, driving up demand for\u00a0floating storage comes as\u00a0OPEC+ recently trimmed\u00a0supply curbs<\/strong>\u00a0from earlier this year on\u00a0expectations demand would improve<\/strong>. Though with the peak summer driving season in the US now over,\u00a0demand woes and\u00a0oversupplied markets\u00a0<\/strong>are pressuring crude and crude product prices.<\/p>\n

Very large crude-oil carrier\u00a0(VLCC) storage has started to rise once again.<\/p>\n

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“Despite the recent slide in oil prices, we think that the OPEC+ leadership will continue to direct its efforts towards securing better compliance rather than pushing for deeper cuts at this stage,” RBC analysts said.<\/p>\n

Another catalyst for the bearish tilt in crude markets is that\u00a0China’s oil imports are likely to subside as\u00a0independent refineries have reached\u00a0maximum annual oil import quotas.<\/p>\n

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Reuters notes, in a separate report, that other top commodity traders are booking tankers to store crude products at sea, including diesel and gasoline.<\/p>\n

Refinitiv vessel data also shows\u00a0Vitol, Litasco, and Glencor have been booking tankers in the last several days to store diesel for the next three months.<\/p>\n

“The market is soft and bearish, and floating storage is returning again,” a market source told Reuters.<\/p><\/blockquote>\n