- News
- Insights
- Bunkerworld .
- ANALYSIS: Global oil in floating storage rangebound amid backwardation, congestion
.
-
Jun 27
-
Jun 22
-
Jun 16
-
Jun 10
-
Jun 6
-
May 30
-
May 26
-
May 18
-
May 13
-
May 11
-
May 4
-
Apr 26
-
Apr 22
-
Apr 11
-
Apr 7
-
Apr 6
-
Mar 23
-
Mar 15
-
Mar 8
-
Feb 28
-
Feb 11
-
Feb 2
-
Feb 1
-
Jan 17
-
Dec 27
-
Dec 10
-
Dec 3
-
Nov 25
-
Nov 16
-
Oct 29
-
Oct 25
-
Oct 8
-
Oct 4
-
Sep 30
-
Sep 29
-
Sep 24
-
Sep 23
-
Sep 17
-
Sep 10
-
Sep 9
-
Sep 6
-
Sep 2
-
Aug 30
-
Aug 27
-
Aug 23
-
Aug 20
-
Aug 17
-
Aug 13
-
Aug 9
-
Aug 3
-
Jul 29
-
Jul 26
-
Jul 22
-
Jul 15
-
Jul 5
-
Jul 2
-
Jun 28
-
Jun 22
-
Jun 18
-
Jun 11
-
Jun 7
-
Jun 4
-
May 31
-
May 28
-
May 25
-
May 21
-
May 5
-
Apr 28
-
Apr 27
-
Apr 26
-
Apr 23
-
Apr 22
-
Apr 19
-
Apr 16
-
Apr 15
-
Apr 14
-
Apr 13
-
Apr 9
-
Apr 7
-
Apr 5
-
Mar 31
-
Mar 23
-
Mar 19
-
Mar 17
-
Mar 12
-
Mar 5
-
Mar 4
-
Mar 3
-
Mar 1
-
Feb 25
-
Feb 24
-
Feb 22
-
Feb 17
-
Feb 12
-
Feb 10
-
Feb 9
-
Feb 5
-
Feb 1
-
Jan 27
-
Jan 25
-
Jan 22
-
Jan 20
-
Jan 18
-
Jan 13
-
Jan 11
-
Jan 8
-
Jan 7
-
Jan 4
-
Dec 31
-
Dec 28
-
Dec 24
-
Dec 21
-
Dec 14
-
Dec 9
-
Dec 9
-
Dec 8
-
Dec 4
-
Dec 2
-
Dec 1
-
Nov 30
-
Nov 27
-
Nov 25
-
Nov 23
-
Nov 17
-
Nov 16
-
Nov 11
-
Nov 10
-
Nov 6
-
Nov 5
-
Nov 4
-
Nov 2
-
Oct 29
-
Oct 27
-
Oct 23
-
Oct 22
-
Oct 20
-
Oct 14
-
Oct 12
-
Oct 6
-
Oct 5
-
Sep 30
-
Sep 29
-
Sep 25
-
Sep 21
-
Sep 18
-
Sep 16
-
Sep 15
-
Sep 14
-
Sep 9
-
Sep 8
-
Sep 4
-
Sep 2
-
Aug 31
-
Aug 27
-
Aug 25
-
Aug 20
-
Aug 19
-
Aug 14
-
Aug 12
-
Aug 7
-
Aug 6
-
Aug 4
-
Jul 31
-
Jul 30
-
Jul 29
-
Jul 28
-
Jul 24
-
Jul 20
-
Jul 16
-
Jul 13
-
Jul 9
-
Jul 9
-
Jul 7
-
Jun 30
-
Jun 26
-
Jun 25
-
Jun 23
-
Jun 22
-
Jun 22
-
Jun 19
-
Jun 16
-
Jun 10
-
Jun 9
-
Jun 5
-
Jun 2
-
May 29
-
May 26
-
May 21
-
May 20
-
May 15
-
May 12
-
May 8
-
May 5
-
May 4
-
May 1
-
Apr 28
-
Apr 24
-
Apr 23
-
Apr 22
-
Apr 21
-
Apr 20
-
Apr 17
-
Apr 16
-
Apr 16
-
Apr 3
The volume of crude and condensate being stored in oil tankers worldwide is flattening out after a mid-summer uptick as backwardation in crude markets continues and congestion at ports potentially inflates the apparent volumes in floating storage.
Global crude and condensate in floating storage amounted to 145.86 million barrels for the week beginning Oct. 4, according to data intelligence firm Kpler, down from 149.17 million barrels in the previous week.
The Kpler data, which estimates the volume of oil on tankers idled offshore for seven days or more, shows stock levels have seesawed within a range of 132.914-149.651 million barrels since the start of August. The trajectory has been a jagged increase since the last week of June 21, when 118.060 million on the week starting June 21 barrels were in floating storage, the Kpler data showed.
Before the COIVD-19 pandemic caused global oil demand to collapse in early 2020, floating volumes were at their lowest at 78.723 million barrels in the week starting Nov. 25, 2019.
Currently, the global oil market price structure is unsupportive to would-be stores of crude and condensate, however. S&P Global Platts assessed Dated Brent at $84.43/b Oct. 11, its highest in three years, and it has been assessed above $81/b each day since Oct. 4, while the structure has held in a steep but relatively stable backwardation in recent months.
In late European trading on Oct. 11, the front-month December ICE Brent futures contract was trading around 75 cents/b higher than January.
The physical forward curve was similar if not quite as steep, with Dated to Frontline swaps -– a derivative that links ICE Brent futures to Dated Brent – showing a slight contango in prompt months.
Even so, a calculated physical forward curve showed a backwardation of over $7/b in the year October 2021 to October 2022.
Not all storage is equal
Analysts at S&P Global Platts Analytics identify three types of floating storage. These are intentional storage -- a deliberate play in a contango market when the structure of the curve more than pays for costs associated with floating storage; forced or distressed storage -- when market dynamics mean leaving a liquid cargo on a vessel is the least-worst option for a short period; when a ship is waiting to discharge because of logistical issues -- this has often occurred in China.
Deliberately putting new volumes into floating storage in present market conditions, when oil is tight and the forward curve is backwardated, is not a profitable move and there is little incentive to store.
As such, many vessels that show up in data counts as floating storage are likely logistically related, Anthony Starkey, senior adviser for trader flow and modelling at Platts Analytics, said.
This was echoed by his colleague. “Where we could see some activity it is mainly due to port congestion, such as in China, or as sellers want to avoid distressed sales,” Andrew Scorer, freight analytics lead for shipping at Platts Analytics said.
Vessels waiting in China
Tankers waiting off the coast of China have had to contend with delays and this is putting them in the category of forced storage.
The average waiting time at Qingdao is one week, long enough to count as floating storage, while at Zhoushan and Rizhao a normal waiting time at present is 20 days as refineries are in no hurry to take crude, market sources said.
All ships currently calling at port in China are at the moment facing some sort of congestion, said Peter Sand, Bimco’s Copenhagen-based Chief Shipping Analyst.
This congestion is either in the form of floating 14-days quarantine due to the Corona pandemic or due to sub-optimal port operations, Sand said.
Operational delays are due to the cut in crude throughputs at refineries and this is leading to hold-ups in tankers discharging.
It has been widely expected that the latest batch of quotas for independent refineries would be allocated at the end of September, but it is still pending in early October, which has made it difficult for refineries to bring in their cargoes on time.
Bunkerworld .,