Creativity and Oil Storage

By: Stacie Kennelly / July 24, 2020

March 2020, when life as we know it stopped in the US, the production of crude oil kept on pumping. This continual pumping has led to a crude oil surplus, and in April when the demand for oil waned, the need for storage increased. As storage option are finite and they began to get full, according to David Deckelbaum, an oil analyst with the investment bank Cowen, “oil companies had to start getting creative as they were unable to continue to store or sell the oil. It was said some companies went bankrupt, while others bought oil tankers and pushed them out to sea, completely full. “

Global supply and demand are also in a state if imbalance. Countries who have historically been takers of crude have seen major shortages in demand and have filled their storage as well. China is finding itself in a similar situation with their storage tanks getting dangerously close to being full. The problem continues to compound as they are receiving oil shipments that were purchased in April and May.

Storage shortages will provide an interesting wrinkle to the supply and demand picture. As prices continue to take large swings on every news headline it will be interesting to see when storage plays are liquidated into the market.

Stacie Kennelly

Written by

Stacie Kennelly

My diverse background in supply chain, transportation, sales, and a small business owner gives me an edge needed to be successful. I am able to provide so much more than fuel solutions as I understand their various needs, while providing them with superior customer service.

Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.


Contact Us