In a sign fuel demand is recovering as lockdowns ease, tens of millions of barrels of crude and oil products stored on tankers at sea due to the coronavirus crisis are being sold.
From March to May, fuel demand tumbled as much 30 percent, with some surplus stored at sea as land storage filled up. Down from more than 180 million barrels in late April, crude held on tankers fell below 150 million barrels by the end of June.
Refined products held on vessels dropped to 50 million barrels from a mid-May peak close to 75 million barrels. Gasoline stocks were the fastest to be offloaded.
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. In addition, members of OPEC+ have curbed production and output from the US and elsewhere has fallen, leaving less surplus oil to keep at sea.
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.
