The massive floating storage volumes that built up earlier this year are unloading. But very, very slowly. In aggregate, they’re dripping out. Meanwhile, oil demand is growing, but again, very slowly. Incremental oil demand is a trickle, not a flood. First the party, now the hangover
Cratering crude-tanker rates are now well below both breakeven levels and where they normally are at this time of year.
According to Clarksons Platou Securities, rates for very large crude carriers (VLCCs, tankers that carry 2 million barrels of crude oil) averaged $17,000 per day on Wednesday. Rates were $100,000 per day at this time last year, propelled by tankers attacks in the Middle East and U.S. sanctions against China’s COSCO. Looking beyond last year’s anomaly, current VLCC rates are less than a third of their 2015-19 average.