Posted on 04/27/2020 4:07:36 AM PDT by Enlightened1
Ham & Swiss please
Back during the oil shortages in the 1970s we heard that tankers were steaming in circles, waiting for the price to go up before they docked to offload.
I like my pastrami on rye!
COOL! I havent seen that in 20+ years!! Tried playing that with my kids on an underpowered PC and got stuck there - that question repeated over and over. The kids still say it sometimes and it cracks me up.
I will believe them because they are intellectually superior to one who is a self enlightened backrow member of the peanut gallery, a monday morning water boy.
Why the empties? Because they’ve no charters, and nowhere to go. Probably the only charters they can get now are for contango, but even that trade has been thrown into tumult.
Ham and Cheese on Rye?
Possibly transporting refined product to overseas locations?
Depends if one of the tankers is the Exxon Valdez.
Not sure I understand what you are trying to say. The tankers are there because the producers have run out of storage capacity on shore. Why would they dump the oil when they will be able to charge us more for it when things come back to normal?
At a “negative price” they are losing money keeping it on the ship.
Or, “it’s better to be first in line when oil that is worth money begins to flow again than last in line trying to get rid of oil you’ve been sitting on for a month.”
I do not know where their ‘home ports’ are. Not many ships have a home port any more. They might be flagged in Panama or Majuro, but never have and possibly never will see those ports. I did notice that one of the ships in the video was a CHEVRON tanker. It is likely that she was engaged in the Alaska-SoCal trade. If there are no liftings scheduled at Valdez, it is more convenient to stand by off LA, where it is easier for the Owner to carry out scheduled maintenance, which they might elect to do sooner whilst the slump lasts, and do crew changes and training. Anyway, it is no loss for LA, as those ships are giving custom to the local chandlers, and likely paying port and light dues while anchored there.
The practice of pre-positioning these bottoms in anticipation of a resumption of liftings, is no longer popular, as there are now so many places where the crude can be lifted. It is better to stand by until they can write a firm charter.
No doubt there are many producers who would love to have these bottoms, but many of them may already be on time charter. The contango trade has pushed the charter rates sky high, and the opportunity to profit from contango is diminishing with the rise in dayrates. In Asia, most of the VLCCs are already in contango trade, as are many of the product tankers. I live in Jakarta, and the government here has chartered many product tankers to hold gasoline and gasoil, which they import from Singapore, so that they can move up scheduled refinery shutdowns for maintenance.
Most of the crude tankers cannot be used to store these products, as they use different pumps and the crude carriers lack the required safety features for the more volatile refined products.
Some of the major tanker operators got in early on the contango trade, and are now profiting nicely, securing 5 or 6 times their pre-crisis dayrates. Others did not happen to be in the right places, and have to weigh the costs of sailing in ballast to participate in the trade, or wait for events to return to somewhat normal.
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