Oil price-play set to boost crude storage at sea

NEW YORK/LONDON (Reuters) – Offshore crude storage, which has declined sharply from record levels in April, may rise again in the U.S. Gulf as front-month U.S. oil futures trade at a steep discount to barrels for later delivery.

The volume of crude oil stored in tankers globally has dipped to between 32 million and 42 million barrels, according to estimates from several shipbrokers. Floating crude storage likely fell more than 60 percent from peaks above 100 million barrels in April.

Offshore storage plays may now regain popularity near the U.S. Gulf Coast, a key refining region and hub for seaborne oil imports, several shipbrokers and industry sources said. A U.S. oil market contango – when prompt crude trades at a discount – is encouraging new storage plays.

Reuters