Posted on 12/16/2008 8:38:07 AM PST by zek157
Supertankers store 50m barrels of oil By Carola Hoyos in Oran and Javier Blas in London
Oil companies and traders are storing at least 50m barrels of oil in supertankers in a clear sign of supply outstripping demand as the global economy slows.
The surge in floating storage, – enough to meet France’s oil imports for a month and the biggest since late 2001–, is likely to push the Opec oil cartel, which is due to meet on Wednesday in Oran, Algeria, to make a deeper production cut to reduce stocks. Storing oil in tankers is unusual as it is significantly more expensive than inland.
EDITOR’S CHOICE Oil hits $50 ahead of Opec meeting - Dec-15Shipowners seek global emissions trading - Dec-15Shipping charter rates soar - Dec-14Abdullah al-Badri, Opec’s secretary general, said on Monday: “Stocks are very high. We have to act. We see a very sizeable reduction [in production].”
Chakib Khelil, Opec president, said: “Everybody is supporting a cut.”
Oil prices rose briefly above $50 a barrel, recovering from a four-year low of $40.50 earlier this month. Oil later traded $1.30 down at $44.95 barrel on concerns that Opec’s cuts would not be enough to prevent further stock building.
Several Opec officials have suggested a 2m barrels-a-day cut, the biggest in recent history, and were also hoping to persuade Russia – the world’s largest oil producer outside the cartel – to make a reduction.
But with Russia’s oil output already declining because of a lack of investment, any commitment is likely to be seen as a political gesture rather than an actual reduction.
Whatever the size of Opec’s cut, the floating storage surge is a clear sign the cartel is losing its battle to cut supplies more quickly than demand falls.
(Excerpt) Read more at ft.com ...
Meanwhile, Shipping rates "soar". Perhaps rates will continue to "soar" so the industry remains solevent. Average spot rates, or the cost of carrying a single cargo immediately, finished the week at $8,261 a day for Capesizes, according to figures from Pareto Dry Cargo, an Oslo shipbroker.
The previous week’s average was $2,763, one of the lowest yet seen. Pareto reported a long-term charter of a Capesize ship at $17,500 a day for a year, more than the daily basic operating costs of such a ship... The market was not yet in “green fields of clover”. There was no immediate prospect of rates returning to the levels of this year, when Capesizes hit a record average charter rate of $233,988 a day on June 4.
A final note on the economy and the "official unemployment rate of 6.5%... U-6 which includes all unemployed and marginally employed workers, i.e., part time that want full time work is 12.2%.
http://www.bls.gov/news.release/pdf/empsit.pdf See table A-12.
Best wishes to OPEC for holding $40.00 a barrel.
Ping!......
Tells me the OPEC countries are strapped for cash too. So far they haven’t been able to keep members from selling at lower and lower prices because they all need the money. Interesting to see what they do when the storage is all filled.
So much for the “Peak Oil” moron’s theories.
Yeah, gas will soon be $7 a gallon!! PANIC!!
Somali terrorists alert
Gas at less than $1.00 a gallon for the New Year! (-:
It means that investors are confident enough to pay storage costs believing the near term rise in prices will result in more profit later even after paying the additional expenses.
Look at the futures market and you can see how quickly they believe it is going to rise. Up $9 in five months.
Crude Light Oil Comp. - nymex
http://online.wsj.com/mdc/public/page/2_3028.html?category=Energy&subcategory=Petroleum&contract=Crude%252520Light%252520Oil%252520Comp.%252520-%252520nymex&catandsubcat=Energy%257CPetroleum&contractset=Crude%252520Light%252520Oil%252520Comp.%252520-%252520nymex
MOST of the idiots are smart enough NOT to come out and express jubilation at $4 gas again to teach us Americans a lesson we ‘deserve’. They all want this, but even most of these people have enough smarts to curtail their glee.
One of the world’s largest tanker owners Frontline Ltd. (FRO) Tuesday said between 20 and 25 oil supertankers have been hired for floating storage in recent weeks, for up to 50 million barrels of oil.
http://www.cattlenetwork.com/Content.asp?ContentID=276608
What, where are all of the EnviroWeenies? What if there is.....A SPILL???? Arghhhh.
BOHICA
Thanks.
Is it possible that a shortage of tankers could drive up crude oil prices more than the supply/demand fundamental for oil would allow? After all, what good is an oversupply of crude oil if there aren’t enough tankers to deliver that oil to customers?
I heard OPEC countries economies pretty much count on oil prices being around an average of $80. They’re probably not happy campers
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