The Department of Energy described interest in the tender of crude from the US strategic reserve as “very high and oversubscribed,” he said. “We can therefore expect that all of the 30.2 million sweet bbl offered will be taken, and the question now is where do we find the spare storage tank capacity to hold all those barrels?”I am surprised. There will be costs associated with storing oil in off-shore tankers.
Jakob said, “We count five large international oil-trading companies taking floating storage options in tankers (a mix of very large crude carriers and Suezmaxes). Some oil might have to stay on the water while some room is made in the onshore tanks.”
He noted, “A few investment banks had been expressing doubt that there will be any takers for the SPR barrels, but the DOE’s comments of yesterday indicate this was wishful thinking while those institutions rant about market manipulation.
I assume the asking price for DOE SPR oil closely matches the "crawler" price, or the spot price one can find linked in the Data Page.
I noted earlier that if oil was taken from the US strategic petroleum reserve, it would be headed overseas. Maybe I was too hasty when I said that I was talking metaphorically since oil is fungible. Maybe it really will be headed overseas. Wouldn't that be something: the US exporting oil to Europe?
For shippers, is this a windfall? Tracking shipping rates and/or share prices of such companies as NAT might be interesting.
