Thursday, February 13, 2020

Oil: "Stranded Tankers and Full Storage Tanks: Coronavirus Leads to Crude Glut in China"

From Reuters via gCaptain:
The coronavirus’s effect on energy markets is worsening, as the sharp fall in demand in China, the world’s largest importer of crude, is stranding oil cargoes off the country’s coast and prompting shippers to seek out other Asian destinations.

More than 1,360 people have died from the coronavirus in China, which has disrupted the world’s second largest economy and shaken energy markets, with international benchmark Brent crude oil down 15% since the beginning of the year.

Major international energy forecasters expect demand to fall in this quarter, the first drop in a decade, due to the outbreak.
Chinese refineries have cut output by about 1.5 million barrels per day (bpd) over just two weeks, causing crude stocks to pile up.

That has left numerous Very Large Crude Carriers (VLCCs), capable of holding more than 2 million barrels of crude each, unable to unload at China’s top crude import terminal of Qingdao, Refinitiv data shows.

Other cargoes are being diverted to South Korea, Malaysia, Singapore and other locales in China, while storage tanks in Shandong province – where Qingdao is located – are filling swiftly, sources said.

Oil storage tanks in China’s eastern Shandong province are nearing peaks seen last June as independent refiners slash processing rates, industry sources said....
....MUCH MORE

An unintended carry trade gone horribly bad (despite the contango). Here's Brent:

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