<\/p>\n
By Jonathan Saul LONDON, July 1 (Reuters) \u2013 Tens of millions of barrels of crude and oil products stored on tankers at sea due to the coronavirus crisis are being sold, in a sign fuel demand is recovering as lockdowns ease, shipping sources say.<\/p>\n
<\/p>\n
Fuel demand tumbled as much 30% from March to May, with some surplus stored at sea as land storage filled up.<\/p>\n
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Crude held on tankers fell below 150 million barrels by the end of June, down from more than 180 million barrels in late April, IHS Markit estimated.<\/p>\n
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Refined products held on vessels dropped to 50 million barrels from a mid-May peak close to 75 million barrels, IHS said, adding gasoline stocks were the fastest to be offloaded.<\/p>\n
<\/p>\n
\u201cVolumes shown under floating storage can potentially drop rather fast during July,\u201d Fotios Katsoulas of IHS said, adding there were several tankers off China waiting to discharge.<\/p>\n
<\/p>\n
Demand for floating storage at the peak of the crisis was helped by a market contango, a price structure where cargoes for delivery in the shorter term are cheaper than those for later delivery, encouraging traders to store fuel until prices pick up.<\/p>\n
<\/p>\n
As the contango has narrowed with rising demand, there is less incentive to store fuel.<\/p>\n
<\/p>\n
In addition, OPEC, Russia and other allies, a group known as OPEC+, have curbed production and output from the United States and elsewhere has fallen, leaving less surplus oil to keep at sea, a more costly alternative to onshore storage.<\/p>\n
<\/p>\n
\u201cWith output levels lower, this has reduced the need for storage on land and combined with a reduction in price contangos, there is less of an incentive to store crude at sea,\u201d said Rebecca Galanopoulos Jones, with broker Alibra Shipping.<\/p>\n
<\/p>\n
Clarksons Research estimated 218 million barrels of crude was held on tankers by June 26 from a peak of 290 million barrels in early May, while about 70.5 million barrels of oil products were stored versus a May peak of 100 million barrels.<\/p>\n
<\/p>\n
\u201cWe believe floating storage is going to gradually decline from now and reach normal levels sometime during the autumn,\u201d a spokeswoman with shipping group NORDEN said. (Editing by Dmitry Zhdannikov and Edmund Blair)<\/p>\n
<\/p>\n
(c) Copyright Thomson Reuters 2020.<\/em><\/p>\n gCaptain<\/p>\n","protected":false},"excerpt":{"rendered":" By Jonathan Saul LONDON, July 1 (Reuters) \u2013 Tens of millions of barrels of crude and oil products stored on tankers at sea due to the coronavirus crisis are being sold, in a sign fuel demand is recovering as lockdowns ease, shipping sources say. Fuel demand tumbled as much 30% from March to May, with …<\/p>\n","protected":false},"author":1,"featured_media":12787,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56],"tags":[4548,6154,8430,1407,166,1408,2463],"class_list":["post-12786","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-marine-world","tag-barrels","tag-boom","tag-fades","tag-floating","tag-oil","tag-storage","tag-water"],"_links":{"self":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts\/12786","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/comments?post=12786"}],"version-history":[{"count":0,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts\/12786\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/media\/12787"}],"wp:attachment":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/media?parent=12786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/categories?post=12786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/tags?post=12786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}