Exclusive: Oil traders book expensive U.S. vessels to store gasoline, ship fuel overseas in sign of

[turbinetree]

Source: Reuters

BUSINESS NEWS APRIL 27, 2020 / 2:41 PM / UPDATED 42 MINUTES AGO

LONDON/NEW YORK (Reuters) - Oil traders are hiring expensive U.S. vessels, normally only used for domestic shipments, to store gasoline or ship fuel overseas, five shipping sources said, in a sign of the energy industry’s desperation for places to park petroleum amid a 30% drop in worldwide demand.

Billions of people worldwide are living under confinement rules due to the coronavirus pandemic, destroying demand for gasoline and other fuels and creating a supply glut. Storage tanks onshore and floating storage in tankers on the water are rapidly filling, leaving fewer options for traders looking to sock away oil.

Several shippers said they have started to book Jones Act (JA) vessels for foreign voyages or to store refined products. The century-old Jones Act requires that vessels traveling between domestic ports be owned and operated by U.S. crews, and they are generally more expensive than other vessels.

“It’s very unusual to use JA tankers for international trips,” one shipping source said.

Those restrictions, and lack of availability, typically make the tankers more expensive than foreign-flagged vessels that go to other countries. Around 45 products tankers are JA compliant, shipping data reviewed by Reuters showed.

Read more: https://www.reuters.com/article/us-global-oil-storage-tankers-exclusive/exclusive-oil-traders-book-expensive-u-s-vessels-to-store-gasoline-ship-fuel-overseas-in-sign-of-desperation-idUSKCN2292NI?il=0

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When again does hurricane season start...........and the market gained 1%.......... ..............

[marble falls]

1. Hurricane season is here: first sign was a Sharpie truck backed up to the WH dropping off a load.

[bucolic_frolic]

2. Life has changed permanently for a few

Home cocoon. Less travel. Home gigs and aspiring careers. Less travel. Focus on health and safety. I'd be 7-8% of that demand is not coming back and that's not an insignificant number.

[turbinetree]

3. You are probably correct.........

[mahina]

10. Hope so

[muriel_volestrangler]

4. Brent oil $20 (was $60 late Jan); West Texas Intermediate $12.60 (was $53)

and that's June delivery oil.

https://www.bbc.co.uk/news/topics/cmjpj223708t/oil

[turbinetree]

5. They are just trying to forestall the complete crash that is slowly creeping in........and your

numbers show a 80% + decline or more, and the US Brent was at one point in the negative.......and it absolutely amazing how everything is one way or another tethered to oil............

Thanks for the information..............

[cstanleytech]

9. Except it wont be a complete crash. I mean sure a number will go bankrupt but someone else will buy

their assets up and it will simply be owned by someone else and maybe under a new name.

[paleotn]

7. Weeeeee!

Brent / WTI arbitrage at its best.

[mitch96]

8. What are these option traders gonna due when the tanker of oil they bid on comes due? nt

[paleotn]

6. $14 WTI doesn't need to move much ...

to more than cover even very expensive storage. And as demand returns, prices will spike on anticipation of a return to some semblance of normal. The world's economy ran on oil prior to CvD-19 and will still be running on oil right after CvD-19. Heck, if you'd bought on Monday, they'd have to pay you to take the oil off their hands. So, just like with the housing crises in 2008, those with cool and rational heads will do just fine.