The world is swimming in unwanted crude oil thanks to pandemic-related demand destruction yet some major crude storage hubs are still only virtually full as purchases from last month have yet to arrive, according to consultancy OilX.
Analysts and top trading executives see a demand loss ranging from just under 20 million barrels per day (bpd) to over 30 million bpd this month due to widespread lockdowns to contain the spread of the novel coronavirus.
To address the acute and unprecedented oversupply, OPEC and Russia will discuss record oil output cuts on Thursday to support prices hammered by the virus crisis.
The major Antwerp-Rotterdam-Amsterdam (ARA) hub was still well below capacity at just under 60 million barrels. The total is about 100 million barrels, OilX said on Thursday. OilX uses three different satellite systems to monitor storage rates.
Space has been rented out and more oil is expected to arrive as refiners bought a lot of crude before widespread lockdowns took effect. Similarly, utilisation of refined products storage in independent storage in ARA is still only at the halfway mark.
At South Africa’s Saldanha Bay, a key hub to store west African crude oil, the volume is slowly inching up.
As of Thursday, Saldanha had about 25.5 million barrels in stock out of a capacity of just over 50 million barrels. Oil storage capacity in the Saldanha Bay area was greatly expanded last year after new tanks came online.
OilX Chief Executive Florian Thaler said tankers carrying 6 million barrels of oil were en route to Saldanha.
Egypt’s Mediterranean terminal at Sidi Kerir that stores Middle Eastern grades was well above the three-year average at just over 12 million barrels out of more than 20 million capacity.
In China, stocks have spiked to over a 1 billion barrels in storage from just below 900 million in January, according to OilX data provided by SIA Energy.
Source: Reuters (Reporting by Julia Payne; editing by Jonathan Oatis)