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Something really, Really Strange Is Happening in The Atlantic Ocean

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March 31, 2016

Early last month, we noted that something very strange was happening off the coast of Galveston, Texas. 

As FT reported, “the amount of oil [now] at sea is at least double the levels of earlier this year and is equivalent to more than a day of global oil supply.” In short: the global deflationary crude supply glut is beginning to manifest itself in a flotilla of stationary supertankers, as millions of barrels of oil are simply stuck in the ocean as VLCCs wait to unload.

Ultimately, this led to nearly 40 crude tankers with a combined cargo capacity of 28.4 million barrels waiting to anchor near Galveston. Here’s what the logjam looked like:

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In the latest sign that the world is simply running out of capacity when it comes to coping with an inexorable supply of commodities, three diesel tankers en route from the Gulf to Europe did something rather odd on Wednesday: they stopped, turned around in the middle of the ocean, and headed back the way they came! 

“At least three 37,000 tonne tankers – Vendome Street, Atlantic Star and Atlantic Titan – have made U-turns in the Atlantic ocean in recent days and are now heading back west,” Reuters reported, citing its own tracking data.

The Vendome Street actually made it to within 800 miles of Portgual (so around 75% of the way there) before abruptly turning around. “Ship brokers said a turnaround so late in the journey would come at a cost to the charterer,” Reuters notes.

The problem: low prices, no storage capacity, and soft demand.

http://madpatriots.com/something-really-really-strange-is-happening-in-the-atlantic-ocean.