Do You Have That In Stock?

29 Jan 2016: After record crude inventories, product stocks are building Over the last 12 to 15 months, there have been numerous reports of increasing crude oil stocks as oil supply exceeded oil demand by an estimated 1 to 2 million barrels per day (Mb/d). With healthy refining margins in most areas of the world, refineries continue to convert crude oil into refined products at a record pace. However, it appears that demand growth is levelling off and, as a result, product stocks have started to increase as well. At some point one would expect that a growing refined product surplus will depress prices and refining margins and reduce refining runs. Until that happens, refined products will be stored close to demand areas. If available, on-shore storage is the cheapest option, while floating (offshore) storage will come into play if there is no availability on land. In recent weeks, we have seen several reports indicating that (a) on-shore refined product storage is filling up in certain parts of the world and (b) traders and oil companies have started to charter vessels for floating storage. Is this the start of a new trend? If so, how long will it last and how will it impact the tanker market? Download Here