One of the issues driving the oil market meltdown is where to put all the excess product that’s filling storage facilities in the United States and that is now crossing the ocean as well. As demand plummeted, the oil glut that was already a problem before the coronavirus pandemic has become even worse. Storage space is running short and dozens of oil tankers have dropped anchor near ports worldwide.
Matt Smith is director of commodity research at Clipper Data. He told Texas Standard host David Brown that the amount of oil being stored at sea is an indicator of the market’s condition.
“It’s been increasing off of Singapore, which is what you’d kind of expect, because it’s the parking lot of Asia,” Smith said. “But we’ve also seen it rising off of less usual places – so, off Europe, off of Africa, off of Latin America. And it’s hit a record in recent days of 170 million barrels.”
What you’ll hear in this segment:
– How common floating oil storage is
– How many very large crude-carriers, or VLCCs are headed toward the U.S.
– Why more oil tankers are floating off the West Coast of the U.S.
Note: This story was updated to reflect the fact that there are currently 170 million barrels of oil stored at sea, not 70 million as was previously stated.
Web story by Shelly Brisbin.
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