• 6 minutes WTI @ 67.50, charts show $62.50 next
  • 11 minutes Saudi Fund Wants to Take Tesla Private?
  • 17 minutes Why hydrogen economics is does not work
  • 3 hours Starvation, horror in Venezuela
  • 30 mins The EU Loses The Principles On Which It Was Built
  • 5 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 20 mins Crude Price going to $62.50
  • 10 hours Anyone Worried About the Lira Dragging EVERYTHING Else Down?
  • 3 hours Chinese EV Startup Nio Files for $1.8 billion IPO
  • 3 hours WSJ *still* refuses to acknowledge U.S. Shale Oil industry's horrible economics and debts
  • 15 hours Correlation does not equal causation, but they do tend to tango on occasion
  • 14 hours Oil prices---Tug of War: Sanctions vs. Trade War
  • 14 hours Russia retaliate: Our Response to U.S. Sanctions Will Be Precise And Painful
  • 16 hours Monsanto hit by $289 Million for cancerous weedkiller
  • 21 hours Saudi Aramco IPO Seems Unlikely
  • 6 hours < sigh > $90 Oil Is A Very Real Possibility
Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Floating Storage For Oil Reaches 2017 High As Traders Employ Aging VLCCs

Tanker

Outdated supertankers are becoming the storage units of choice for commodity traders looking to take maximum advantage of the new oil price crater, according to a new report by Reuters.

Brokers who spoke to Reuters said roughly 10 very large crude carriers (VLCCs) aged between 16 to 20 years have been employed as excess crude storage since the end of last month. Each unit holds 2 million barrels of oil.

Thirty other supertankers are parked in Singapore and Malaysia’s Linggi, largely due to a market condition called contango – where oil futures are more expensive than an order for immediate delivery.

"It makes a lot of sense for a trader to pay $16,000-$19,000 per day to take an older VLCC for 30-90 days to store oil," said a Singapore-based supertanker broker, who chose to remain anonymous.

Data released by Kpler, an energy data provider, shows that total global floating storage reached 102 million barrels in the past ten days. Speaking with Oilprice today, Kpler’s Francois Cazor said that “Oil floating storage is at its peak for 2017.”

In Q1 and early Q2 2017, floating storage had declined from 100 million barrels to 72 million barrels as oil prices inched upwards due to OPEC’s production deal, according to Kpler data.

The bloc agreed to extend its 1.2 million bpd cut through March 2018, but at this point, all price gains have been erased from new production in Libya, Nigeria, Iraq and the United States. Saudi Arabia, the de-facto leader of OPEC, began a policy of lowering exports to the United States and Asia at the beginning of this month to force inventories to go down. The U.S. began importing crude from Iraq to dodge the maneuver and shale producers continued cheap production and exports.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Naomi on June 18 2017 said:
    Nobody plugs an oil well. Saudis must store what they hold off the market. The charade is not helping oil prices.

Leave a comment

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