By the end of may all the world of tanks will be completely full. The demand for oil has been economic activity in the epidemic of the coronavirus close to zero marks. As predicted by Goldman Sachs, in the next two weeks all oil tanks – ground storage, marine tankers will be filled at the brim. Our expert did not rule out the possibility that oil simply will be drained into the sea.
Now the price of oil increases — in just a week of the quotation of Brent increased by more than 50% — from $20 to 31 per barrel. Experts attribute the price increase with the new deal Alliance of OPEC+ a major reduction in oil production, concluded in April. But how long enough at the punters and fundamental investors optimism?
Data Goldman Sachs about the glut on the world oil market looks very encouraging, storage facilities, oil refineries in India, one of the major consumers of hydrocarbons, are involved in 95%.
the Same alarm bells come from Europe: shipments to the UK, Germany, France, Italy and Spain exceed demand by about 50 million barrels in a week. Store the main us oil storage in Cushing completed by more than 80%. By early summer, as experts believe, designated for storage of hydrocarbons will be finally completed.
how Real is this threat to the world in General and Russia in particular? What will happen to the price of a barrel – it will fall again below zero, like in the 20’s days of April? Concerned in the construction of new storage facilities? With these questions, “MK” turned to the experts: corresponding member of RAS, head of chair of Gubkin Russian state University of oil and gas. Gubkin Elena Telegin and lead analyst of the national energy security Fund Igor Ushkovo.
Threat from analyst Golden Sachs real? In the Internet appeared the video from Venezuela — they can see that the oil from the bunkers is literally on the ground. How can this be explained?
Telegina: these frames are likely to call a bit exaggerated and designed for nonprofessional biased the perception of the viewer.
In April, the may futures do trading at negative price. It was clear that otherwise the oil would be impossible to sell. Now the situation has not changed. Almost all global oil storage is filled. It is possible that this dramatic situation will continue for another two months, but by mid-summer, the demand will rebound due to the effect of a transaction OPEC+, and a gradual recovery of demand for raw materials after the pandemic.
Yushkov: of Course, a new OPEC deal+ should work. However, one should not expect an instant effect from such agreement.
Conclusion agreed��I allowed to hint to the producers and buyers of raw materials, land-based storage tanks and sea tankers will soon have to deal with the supply of new quantities of raw materials. That is, to keep the oil became less profitable than to sell it. However, the demand at one point will not grow.
it is possible that manufacturers will dump raw materials into the sea, just to keep the volume available for filling with fresh hydrocarbons. While the place for storage of oil there — even the famous American “Cushing” are available volume for filling the “black gold”. But the resource base is gradually filled. Around July, if the parties to the agreement of OPEC are to meet their obligations, the market will return to pre-crisis levels and volumes of oil that offer traders who do not exceed the demand for hydrocarbons.
– whether it is Possible to quickly create a new underground storage of oil, including through the use of already-depleted fields that could be natural reservoirs for raw materials?
Telegina: This is not the most efficient method of storage. Extremely economical to first produce oil, then to pump the raw material back into the reservoir.
to Create a large underground storage of oil is less than a year. Will cost such a project of several billion dollars. Only we must remember that its service when the demand for oil will grow, will be several times more expensive than services that are similar to the bunker can provide. Therefore, no new storage capacity in the world today can not hear.
Yushkov: you Have to understand: for three days and even three months a new storage facility not be built. And when such a building that requires significant investment, will be created, it is likely to be already obsolete if the demand for oil will rise, then store significant quantities of raw materials will not become profitable. Why keep the oil “in the bosom” if it is possible to sell at a profit and not be wasted in service of its content.
Even now, manufacturers are much cheaper to rent crowded netbouncer or sea transport, rather than construction of additional storage facilities. Similar capacity will save only in times of crisis. In the absence of such shocks, as the coronavirus, they will be idle and taking money for a service.
the Storage of oil were always on the territory of the importing countries. Major projects are going to implement in China. Russia, as a supplier of oil, always had only a conduit, capable of ensuring the stable transportation, but not long-term storage of raw materials.
back in March, the daily cost of freight of tankers carrying hydrocarbons to China increased to $250 thousand this was influenced by PLAna Saudi Arabia to increase production and booking of vessels for storage of cheap oil. What’s the going rent sea supertanker capable of storing several hundred thousand barrels of oil?
Telegina: This is an extremely volatile issue. The freight cost has soared almost ten-fold. But even for such money will be extremely difficult to find available containers for storage of hydrocarbon resources. In the waters of major port cities are a few dozen supertankers full of the eyeballs that are waiting to be unloaded.
Yushkov: renting a sea of supertankers in recent times, of course, increased. However, there is a paradox. If you rent a tanker for two months, when the price of a barrel exceeds $20, the end of an expiring term lease to be at a loss. Storing cheap oil is a highly dubious prospect. Oil, like other hydrocarbons, it is better to sell on a rolling basis, rather than storing it “under the pillow”, as dollars or gold.
Read the “Oil-flooded-with all their stores going hell”
