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Something Very Strange Is Taking Place Off the Coast Of Galveston, TX

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ZeroHedge

Having exposed the world yesterday to the 2-mile long line of tankers-full’o'crude heading from Iraq to the US, several weeks after reporting that China has run out of oil storage space we can now confirm that the global crude “in transit” glut is becoming gargantuan and is starting to have adverse consequences on the price of oil.

While the crude oil tanker backlog in Houston reaches an almost unprecedented 39 (with combined capacity of 28.4 million barrels), as The FT reports that from China to the Gulf of Mexico, the growing flotilla of stationary supertankers is evidence that the oil price crash may still have further to run, as more than 100m barrels of crude oil and heavy fuels are being held on ships at sea (as the year-long supply glut fills up available storage on land). The storage problems are so severe in fact, that traders asking ships to go slow, and that is where we see something very strange occurring off the coast near Galveston, TX.

 
FT reports that “the amount of oil at sea is at least double the levels of earlier this year and is equivalent to more than a day of global oil supply. The numbers of vessels has been compiled by the Financial Times from satellite tracking data and industry sources.”
The storage glut is unprecedented:
 
Off Indonesia, Malaysia and Singapore, Asia’s main oil hub, around 35m barrels of crude and shipping fuel are being stored on 14 VLCCs.
 
“A lot of the storage off Singapore is fuel oil as the contango is stronger,” said Petromatrix analyst Olivier Jakob. Fuel oil is mainly used in shipping and power generation.
 
Off China, which is on course to overtake the US as the world’s largest crude importer, five heavily laden VLCCs — each capable of carrying more than 2m barrels of oil — are parked near the ports of Qingdao, Dalian and Tianjin.
 
In Europe, a number of smaller tankers are facing short-term delays at Rotterdam and in the North Sea, where output is near a two-year high. In the Mediterranean a VLCC has been parked off Malta since September.
 
On the US Gulf Coast, tankers carrying around 20m barrels of oil are waiting to unload, Reuters reported. Crude inventories on the US Gulf Coast are at record levels.
 
A further 8m barrels of oil are being held off the UAE, while Iran — awaiting the end of sanctions to ramp up exports — has almost 40m barrels of fuel on its fleet of supertankers near the Strait of Hormuz. Much of this is believed to be condensate, a type of ultralight oil.
And unlike the last oil price collapse during the financial crisis only half of the oil held on the water has been put there specifically by traders looking to cash in by storing the fuel until prices recover. Instead, sky-high supertanker rates have prevented them from putting more oil into so-called floating storage, shutting off one of the safety valves that could prevent oil prices from falling further.
 
A widening oil market structure known as contango — where future prices are higher than spot prices — could make floating storage possible.
 
 
 
The difference between Brent for delivery in six months’ time and now rose to $4.50 last week, up from $1.50 in May. Traders estimate it may need to reach $6 to make sea storage viable.
JBC Energy, a consultancy, said in many regions onshore oil storage is approaching capacity, arguing oil prices may have to fall to allow more to be stored profitably at sea.
 
“Onshore storage is not quite full but it is at historically high levels globally,” said David Wech, managing director of JBC Energy.
 
“As we move closer to capacity that is creating more infrastructure hiccups and delays in the oil market, leading to more oil being backed out on to the water.”
 
Patrick Rodgers, the chief executive of Euronav, one of the world’s biggest listed tanker companies, said oil glut was so severe traders were asking ships to go slow to help them manage storage levels.
 
“We are being kept at relatively low speeds. The owners of the oil are not in a hurry to get their cargoes. They are managing their storage capacity by keeping ships at a certain speed.”
However, as AP reports, there is something very unusual going on off the coast in Galveston…
 
More than 39 crude tankers w/ combined cargo capacity of 28.4 million bbls wait near Galveston (Galveston is area where tankers can anchor before taking cargoes to refineries at Houston and other nearby plants), vessel tracking data compiled by Bloomberg show, whichcompares w/ 30 vessels, 21 million bbls of capacity in May. Vessels wait avg of 5 days, compared w/ 3 days May
 
A traffic jam of oil tankers is the latest sign of an unyielding global supply glut.
 
More than 50 commercial vessels were anchored outside ports in the Houston area at the end of last week, of which 41 were tankers, according to Houston Pilots, an organization that assists in navigation of larger vessels. Normally, there are 30 to 40 vessels, of which two-thirds are tankers, according to the group.
 
Read more at ZeroHedge:

http://www.zerohedge.com/news/2015-11-12/something-very-strange-taking-place-coast-galveston 

 
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    Comments

    Your Comments
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    Total 25 comments
    • Oxnard

      I listen to every word uttered on Z3news

      Think this is what they are lining up for? The massive turn around? If war breaks out in the middle east or the dollar is devalued 30-40% (22 NOV???) oil prices will scream northward.

      http://z3news.com/w/coming-distress-increase-oil-prices/

      • sitrep

        Correct, The hell storm is on the way. The Eastern Coalition has been squeezed, slapped around, boxed in they now know they have no choice.
        Yes WWWIIII is about to break out.

        The Western Coalition has fine tuned its Alien Tech weapons, just test fired the Plasma Hyper Time Distortion Dimension device over California cities using the public to test the time plasma wave.
        Some reports claim people feel as they are now living in different realities, and feeling of loosing self identities. As reported on youtube many blue beam devices was discovered on moon missions.

        Web-Bot Report Daily: Notice all the proxy wars. Who is who? Some say the Elitis are behind these proxy wars, others claim the Aliens are taking over, and have already invaded using the proxy wars as a smoke screen, challenging International law, by citing Intergalactic laws.

        Web Reports the Invasions could start any moment now.
        China has a Total News Black Out, Code Name “Iron Curtain” They have been on high alert Zulu Niner status, and initiated war plans.
        China Has stocked piled resources, and launched Satellite Destroyer Drones.

        The Eastern Coalition has failed to realize, that the Western Coalition has much Alien Technology, and can send them into the dimension of the Abyss.
        Web Bot reports State the West has a massive build up on the far side of the moon poised to strike with hyper dimensional Plasma beams. Although this will totally knock out the electric, and communications grids, it is considered minor collateral damage.

        • Anonymous

          WHAT ?

    • Anonymous

      Probably most everybody’s heard how an Arab takes a bubble bath, but, if not, he climbs into a barrel of oil and farts.

    • Pink Slime

      Yippee! 25 cents gallon of gas. :lol:

      • Warren

        I found it curious that between yesterday and today, what with this glut of excess oil, the price of gas went *up* 4¢ where I live.

        • Elekwense

          Because prices aren’t based on real supply and demand.

    • Cletis

      Whoa…wait a minute….anyone with a modicum of merchant navy knowledge can see those ships are small freighters & bunkers & bulkers, with nothing exceeding 5000 tonnes.
      One ocean going bulk oil tanker exceeds 100,000 tonnes typically.
      This photo is a misleading load of crap.

      • LifeIs

        How can the photo mislead you, when the text of the article provides facts and figures?

      • Anonymous

        “This photo is a misleading load of crap.”

        One of these days somebody’s going to say something truly shocking around here, like, “That photo is real!” And if the photo matched the context of the article, nobody could withstand it, though more likely it would only get 30 views, maximum.

        • The Clucker

          You are hilarious. :lol:

    • Aloha

      Within six months to a year, plasma could replace crude and if that happens, this oil won’t sell, it will sit there threatening the environment.

      • AllRoadsLead2NWO

        The environment, the environment, the environment. You know this planet was here 4.5 billion years before humans got here and it will still be here at least another 4.5 billion after all humans are gone. For a couple of billion years the “environment’ here was so bad that it was impossible for humans to have lived here then anyway. The environment will always take care of itself- whether humans are here or not.

    • TEXASPROUD

      I was on a long weekend get a way to Galveston Island a few months ago and took notice of the long line of supertankers that were just sitting off shore. I wondered about it, but just figured that the port was back-logged..

    • Faith

      Are we sure there is oil in those ships and not something else?

    • Anonymous

      Now would be a good time to replenish the Strategic Oil Reserve which Obama decimated awhile back!

    • Don - 1

      Oil is a-biotic. That means that the earth produces more oil than we have any use for. The supply is endless.

      https://en.wikipedia.org/wiki/Abiogenic_petroleum_origin

      Abiotic oil is common on most earth-size planets in the universe.

    • albertan

      I have this bad feeling in the pit of my stomach that something catastrophic and deliberate could happen off the coast of Galveston.

      • Betsy

        Hope it’s indigestion and not something catastrophic. :-)

    • Anonymous

      I live right on the Houston shipping channel. Shipping is very slow right now. I have noticed that there is not nearly as many ships coming in as normal. They actually dont bring super tankers in here. They unload it to smaller shuttle tankers to bring it in to the refineries. Everything that can hold oil in the city is full of oil now an they are building huge new tanks to store more in many places. They really need to stop bringing it in. We are like China, we have no place to put it.

    • Elizabeth Ryan

      Something I was greatly concerned. You need to look into the matter urgently! :!:

    • Freddie1953

      Something is wrong with the photos, full tankers sit low in the water. They can carry sea water as ballast, which is what these look like, just enough to stop wind drift.

    • Freddie1953

      Cletis is right: these ships are mixed and empty. Berthed here to save dock fees, a part of the oversupply of worldwide shipping from the “Baltic dry shipping index”

    • jknbt

      if the big oil producers keep this outrage up, gasoline will go to $1 a gallon! oh-nooo! say it ain’t soooo!!!

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