• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 2 hours Which producers will shut in first?
  • 13 mins Its going to be an oil bloodbath
  • 8 hours Russia's Rosneft Oil Company announces termination of its activity in Venezuela
  • 1 hour Why should ANY oil company executive get ANY bonus now?
  • 4 hours How to Create a Pandemic
  • 56 mins The Most Annoying Person You Have Encountered During Lockdown
  • 57 mins KSA taking Missiles from ?
  • 59 mins Dr. Fauci is over rated.
  • 51 mins Breaking News - Strategic Strikes on Chinese Troll Farms
  • 52 mins CDC covid19 coverup?
  • 10 hours Saudi Arabia Can't Endure $30 Oil For Long
  • 11 hours Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
Alt Text

The World’s Cheapest Natural Gas

Associated gas production in the…

Alt Text

The Cure For Low Gas Prices Is Low Gas Prices

Soaring debt and very low…

Alt Text

Is The Japan LNG Buying Spree Over?

Inventories of LNG in Asia…

Bruce Krasting

Bruce Krasting

I worked on Wall Street for twenty five years. I was an FX trader during the early days of the 'snake' and the EMS. Derivatives…

More Info

Premium Content

Floating Crude and Shipping Rates Could Trigger $4 Gas

Is $4 Gas in the Next few Months a Foregone Conclusion

For years there has been a large supply of crude floating on big oil tankers. A significant portion of this is not under contract and does not have a specific delivery date. Typically these vessels head for Asia or the Americas. They do it at slow speed. They wait for contact from the owners that the crude has been sold and a delivery date has been set. When that happens the ship picks up speed and heads to the intended port.

It is my understanding from talking to some shippers that this is happening in a very big way as I write. It makes perfect sense. If you were China Inc. and worried this morning about the predictability of supply, the first thing you would do would be to secure as much of the floating crude that was out there. We saw this same pattern in the early days of Egypt. Back then the rush was to bulk up on supplies of wheat. Today it is crude.

Two consequences from this. First a minor one. The cost of chartering an oil tanker has fallen from a high of $200,000 per day to as low at $20,000 of late. We are going straight up on this number. Transportation is part of the cost we pay to import the 10mm barrels of oil a day we consume. This increased cost will flow very quickly into the cost of gas.

More importantly is that the cost of spot crude (not futures) is going to skyrocket. It already has. Look at the price being paid for spot crude at the Gulf of Mexico. It opened yesterday at $112. There is a $20 premium for physical crude versus WTI Should the current uncertainties on supply continue (or worsen) $4 gas in the next few months is a foregone conclusion.

Crude Oil Spot Price

By. Bruce Krasting


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News