LONDON - A stalled global economic recovery from the coronavirus pandemic is leading to a fresh build-up of global oil supplies, pushing traders including Trafigura to book tankers to store millions of barrels of crude oil and refined fuels at sea again.
A number of the vessels are newly-built and are due to store gasoil and diesel, for which unsold volumes are especially high after a modest recovery mid-summer. Brent crude oil futures are languishing around US$40 a barrel after posting their biggest weekly decline since June.The spread between Brent crude for prompt delivery and six-months in the future Lcoc1-lcoc7 has been declining steadily toward US$3 near lows last seen in late May.
Global oil inventories remain sharply above average when looking at recent years. Although stocks have drawn at a pace of around 1.6 million barrels per day over the past 30 days, they are still some 600 million barrels above last year's levels, according to Morgan Stanley.