Affected by the epidemic, the global economic recovery has stalled, leading to a further increase in global oil supply, prompting traders, including Trafigura, to book tankers to store millions of barrels of crude oil and finished fuel at sea again.
With the so-called shipboard floating storage, the traditional onshore storage capacity is still close to capacity due to oversupply.
According to trade sources and shipping data, the trading company Trafigura has hired at least five of the largest tankers, each of which can store 2 million barrels of oil, known as VLCCs.
Many of the ships are new and will store gasoline and diesel, which are particularly large unsold after a slow recovery in midsummer.
Inventories have increased despite sharp cuts in production in major oil producing countries such as Saudi Arabia and Russia, as well as slower production in recent months by refineries due to an unprecedented drop in consumption.
According to shipping data and traders’ data, other top traders, including Vitol, litasco and Glencore, have also ordered large tankers in recent days to store diesel for 90 days.
Brent crude oil futures fell to about $40 a barrel after the biggest weekly decline since June.
A market source said that the market was weak and bearish, floating stocks appeared again.
The price difference between Brent crude oil for immediate delivery and lcoc1-lcoc7 for delivery six months later has steadily declined to US $3, close to the low at the end of May.
In recent years, global oil inventories are still far above average. Although inventories have fallen by about 1.6 million barrels a day over the past 30 days, they are still about 600 million barrels higher than last year’s level, according to Morgan Stanley.
Rats said the biggest drop in inventories was in crude oil inventories, but finished oil inventories remained “stubbornly” high.
Signs of weak margins exacerbate the gloomy outlook. Record crude oil purchases in the summer months eased the loss of global demand after a surge in cheap oil.
Aramco, the Saudi oil giant, slashed the official price of its flagship Arabian light crude oil exported to Asia in October by $1.40 a barrel in the hope of regaining interest.
With the North Sea Brent crude oil price difference at its lowest level since June, crude oil futures price fell along with the global spot crude oil price.
Oil sales in West Africa have been affected, with Nigeria still looking for buyers for planned exports last month, with crude oil prices in Angola falling to their lowest level since May.