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The Stunning Visualization Of The World's 3 Billion Barrel Oil Glut

Tyler Durden's picture




 

While talk of record backlogs of supertankers and an unprecented 3 billion barrels of crude oil stock-piles sound impressive - and are weighing on crude prices - the following stunning image provides some context for just what this means...

 

If the 3 billion barrels of crude oil gluttiness was put into tankers, the line would reach a stunning  530 kilometers...

Source: @JavierBlas

*  *  *

As we previously noted, via Bloomberg,

Oil stockpiles have swollen to a record of almost 3 billion barrels because of strong production in OPEC and elsewhere, potentially deepening the rout in prices, according to the International Energy Agency.

 

This “massive cushion has inflated” on record supplies from Iraq, Russia and Saudi Arabia, even as world fuel demand grows at the fastest pace in five years, the agency said. Still, the IEA predicts that supplies outside the Organization of Petroleum Exporting Countries will decline next year by the most since 1992 as low crude prices take their toll on the U.S. shale oil industry.

 

“Brimming crude oil stocks” offer “an unprecedented buffer against geopolitical shocks or unexpected supply disruptions,” the Paris-based agency said in its monthly market report. With supplies of winter fuels also plentiful, “oil-market bears may choose not to hibernate.”

 

Total oil inventories in developed nations increased by 13.8 million barrels to about 3 billion in September, a month when they typically decline, according to the agency.

 

 

The pace of gains slowed to 1.6 million barrels a day in the third quarter, from 2.3 million a day in the second, although growth remained “significantly above the historical average.” There are signs the some fuel-storage depots in the eastern hemisphere have been filled to capacity, it said.

And the backlog of SuperTankers continues to surge - to record highs for this time of year...

31 very large crude carriers head to U.S. ports, highest since last May and most for time of year in data going back to 2013, ship tracking information compiled by Bloomberg shows.

 

 

In fact some firms ar enow breaking charters...Frontline terminates long term charter for tanker Mindanao

 

Frontline agreed with Ship Finance International Limited to terminate the long term charter for Suezmax tanker Mindanao, and will receive a compensation payment of approximately $3.3 million from Ship Finance for termination of current charter

 

Following this termination, the number of vessels on charter from Ship Finance will be reduced to 14 vessels, including 12 VLCCs and two Suezmax tankers

 

The stock buffer is bearish and will probably set a lid on how much higher prices can go in 2016,” Torbjoern Kjus, an analyst at DNB ASA in Oslo, said by phone. “There’s a sizeable risk that we could run totally full,” in terms of storage capacity, he said

 

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Thu, 11/19/2015 - 17:55 | 6815118 HedgeAccordingly
HedgeAccordingly's picture

if economy were on FiYA... we would be burning more fossil fuels. but since it is not on FIYA.. we have enough oil to last a lifetime without more pumping.. ok not lifetime but a hell of a long time.. 

 

International Energy Agency: As Crude Oil Stockpiles Balloon, Glut Set To Worsen 
Thu, 11/19/2015 - 17:59 | 6815128 Crash Overide
Crash Overide's picture

I paid $25 to fill up the 13 gallon tank on the Honda today @ 1.89 per gallon.

I am ok with it.

Thu, 11/19/2015 - 18:21 | 6815206 Analog
Analog's picture

Gas at "my" station is down to $1.79, was $1.83 a few days ago (credit price).  With all the petroleum product ships hanging out in the off Galveston and Port A. (red and pink icons) I wouldn't be surprised if gas goes down to $1.59 by the end of the year.

http://www.marinetraffic.com/en/ais/home/centerx:-94/centery:29/zoom:9

For those not in the know, there are zillions of pipelines that bring oil (and gas) to shore from the rigs in the Gulf, no ship required.

Thu, 11/19/2015 - 18:41 | 6815259 EscapeKey
EscapeKey's picture

unsurprisingly, because i live in rip-off UK - I still pay £1.05/litre, down from £1.40 at the very peak.

but then, the majority of the price of petrol in the UK is tax.

 

best of all - first you pay a fuel duty - and then, 20% VAT is added on topof the total price. so you pay taxes on top of taxes.

 

with the duty standing at £0.5795, this means £0.5795 * 1.2 = under no circumstances less than 70p/litre is paid to the tax man. as a US gallon is 3.785, and the $/£ conversion rate is 1.53, this means no less than 1.53 * 3.785 * 0.70 = $4 is paid in taxes per gallon in the UK. and that is assuming that the petrol itself is free.

 

 

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

    From 23 March 2011 the UK duty rate for the road fuels unleaded petrol, diesel, biodiesel and bioethanol is £0.5795 per litre (£2.63 per imperial gallon or £2.19 per U.S. gallon). Value Added Tax at 20% is also charged on the price of the fuel and on the duty.
Thu, 11/19/2015 - 18:43 | 6815299 bigrooster
bigrooster's picture

You lost me at living in the UK.  But if you do why even own a car?  In London it makes no sense.  If you don't live in London why live in the UK?  If you like the country cash in your british pounds and move to America, or Australlia.

Thu, 11/19/2015 - 19:26 | 6815509 absente reo
absente reo's picture

London is a big place. If you travel to outside of London it's worth having a car. Even if you don't, as long as you don't live in the very centre, it's worth having a car.

As for "if you don't live in London...", please, really?

Thu, 11/19/2015 - 20:09 | 6815691 Automatic Choke
Automatic Choke's picture

3 billion barrels is only about a 30-40 day world supply.  Not much of a stockpile....oil is a volume intensive commodity, it must flow, not sit in storage.

At the margin, that is more like a year cushion for a +/-10% change in supply or demand, but if there were massive disruption in the mideast, the glut would suddenly appear to be a very small cushion.

 

Perhaps now is a good time to stack up barrels in your backyard (or ETF equivalent).

 

Thu, 11/19/2015 - 20:54 | 6815852 philipat
philipat's picture

So the world should be very grateful to the Saudis. The world economy is still growing but a much lower rate. That means that oil consumption is still growing but at a much lower rate, proportionate to economic growth. That means the price reduction resulting from a supply/demand imblalance has come from the supply side. But, IMHO, not enough to account for such a fall in price. As is normal with all "Markets" these days, something doesn't smell right. Perhaps Washington's grubby fingerprints are to be found here somewhere?

Fri, 11/20/2015 - 15:12 | 6818764 Tarzan
Tarzan's picture

"Oil glut"

"record backlog of supertanker"

"Oil stockpiles have swollen"

"record supplies" 

"There’s a sizable risk that we could run totally full" 

"Oil stockpiles have swollen to a record 3 billion barrels because of strong production...." 

Supply Supply Supply

 

Does anyone else see something missing from all of these stories about the Oil Glut?

Story after story tells of the crash in shipping rates, the slide in retail sales, the dismal inflation numbers, yet nobody mentions any of this when talking about the glut in oil inventories.

It's very curious to me that there is not one word about demand in any of these stories Zero Hedge keeps pushing. 

Why is ZH pushing the MSM propaganda that insists on white washing the crash in world demand for Oil?

It's the Demand, Dummies!

AKA,  "It's the Economy, Stupid!"

Thu, 11/19/2015 - 21:01 | 6815873 random999
random999's picture

Rest of europe is no better. Even norway is turboboosting their oil tax.

 

Im sweden the price dropped from around 14 to around 12 per liter while the global oilprice was slashed in more than half.

Thu, 11/19/2015 - 20:46 | 6815826 rightwingterrorist
rightwingterrorist's picture

Europeans are not allowed to "move" to the U.S.

Now, if you want to lop heads off, kill YT, rape, pillage, steal, or possibly come from Burkina Faso where the average I.Q is 68, well, our arms are open to welcome you.

Thu, 11/19/2015 - 21:43 | 6816000 Haka Matohi
Haka Matohi's picture

Sounds like uz getting gouged once again by those no go stinking oil companies.  Hillary is right again.

Thu, 11/19/2015 - 19:23 | 6815486 steelrules
steelrules's picture

Filled my truck today, $1.19 / liter = $4.76 CDN / US gallon  And I'm not ok with it.

Thu, 11/19/2015 - 20:48 | 6815834 Kirk2NCC1701
Kirk2NCC1701's picture

You got ripped off.  My wife filled the tank of her Toyota Prius for FREE -- with "Sunshine"

Solar Panels --> Charger + Battery --> Prius.  QED.

Fuck You, Arabs and Exxon!

We won't have true energy independence or libertarian freedom to decouple from the Grid, until we use Solar Panels to power all kinds of stuff around the house.  Sell the excess to the Utility company (at peak rates) and buy it back at night (low rates).

Sometimes, How you see the problem, Is the problem.

Thu, 11/19/2015 - 22:17 | 6816093 pipes
pipes's picture

"Good for you!"

"Tha-anks!"

 

https://www.youtube.com/watch?v=AnFAAdOBB1c

Thu, 11/19/2015 - 22:32 | 6816135 db51
db51's picture

Free Charger?  Free Batteries?   Free Prius?    Fucking POS Car that will soon be worthless .....but hey...at least you didn't get ripped off by onyone....Got a solar panel on the wife's dildo yet?    

Sat, 11/28/2015 - 15:32 | 6850158 sun tzu
sun tzu's picture

I guess her prius doesn't have tires

Thu, 11/19/2015 - 18:02 | 6815137 seek
seek's picture

Exactly, oil is now hitting sub-$40s, and there's a massive glut at the lowest prices in years -- that says there's no demand.

BDI - record low -- that says there is no demand.

Container cargo -- rates plunging, large percentage of empty containers shipping -- says there is no demand.

We're in a 2008-style collapse and have been for months, but the financial wizards have it all concealed and there's no Lehman to make it go boom (yet.)

Thu, 11/19/2015 - 18:06 | 6815152 HedgeAccordingly
HedgeAccordingly's picture

spot on.. agree.. no one is spending. bc they are not confortable to spending..

Thu, 11/19/2015 - 18:25 | 6815223 CrazyCooter
CrazyCooter's picture

Demand was the first thing I thought of as well, but didn't see much mention in the article. Pretty much all the oil news out there lately is supply side analysis. I really doubt supply took off like a rocket ship, given the long timelines for oil related projects, so it feels like demand has cratered globally and there aren't enough customers for producers.

Regards,

Cooter

Thu, 11/19/2015 - 18:28 | 6815244 Analog
Analog's picture

Went to an industry lecture this week presented by a large, private american company that is extracting oil for $10/barrel.  (I was impressed, if they weren't private I'd invest.)

Container shipping - I live within sight of a container terminal, for months now there is rarely more than one ship unloading, and often no ships are there at all.  Way different than last year.

Thu, 11/19/2015 - 18:04 | 6815145 monkeyboy
monkeyboy's picture

So does this mean Peak Oil is a boon for the consumer?

Thu, 11/19/2015 - 18:08 | 6815138 alexcojones
alexcojones's picture

People Need to DRIVE MORE.

I suggest we drive over to Syria, and pick up the refugees and drive them to Merkels front door, then bus some back to every Congress Critter house.

Me? I'll drive over to Syrian Girl Bloggers house and pick her up.

Aussie internet sensation takes on IS 
Thu, 11/19/2015 - 18:16 | 6815184 vq1
vq1's picture

id love to drive more. or drive at all that is. But I cant afford a car. 

 

Although i do see a deal for 0 down... Ill be right back. 

Thu, 11/19/2015 - 18:03 | 6815141 two hoots
two hoots's picture

And just today the Saudi Finance Minister stated "Crude demand is expected to rise by 1 million barrels a day every year in this decade, and the world requires more investments in oil to compensate for declining recovery rates, he said. The recovery rate for all the world’s oil fields is decreasing by about 4 million barrels a day, he said." (NewsMax)

Read more: Saudi Oil Minister Says OPEC With Others to Stabilize Market

Thu, 11/19/2015 - 18:06 | 6815151 HowardBeale
HowardBeale's picture

The hype about a "glut" is reaching its apex; it is now time to buy the hell out of oil.

3 Billion barrels--which includes all the strategic reserves--is 30 days world supply. Nothing, in context.

Thu, 11/19/2015 - 18:10 | 6815163 HedgeAccordingly
HedgeAccordingly's picture

nothing? .. its highest in history.. we are pumping the most oil in history world over.. i think many said the same thing with crude at 85... but do agree oil likely moves up.. but not a function of demand.. more a function of financial trading of crude supply demand.. not physical

Thu, 11/19/2015 - 22:14 | 6816087 pipes
pipes's picture

All these loudmouths spouting "30 day supply" have zero understanding of supply chains and JIT delivery.

 

30 days will FUCK YOUR SHIT UP.

Thu, 11/19/2015 - 18:09 | 6815159 chisler
chisler's picture

That's great news. I can't wait for it to triple in length. In Canada we pay $1,24 / LITER so it may require that length to get to 10 x.

Roll on.

Thu, 11/19/2015 - 18:14 | 6815178 MarkD
MarkD's picture

I saw a Tesla today. It's all Musk's fault.

Thu, 11/19/2015 - 18:17 | 6815189 vq1
vq1's picture

may not use much but is certainly made of and made with alot. 

Thu, 11/19/2015 - 22:35 | 6816142 buzzy_the_pirate_dog
buzzy_the_pirate_dog's picture

And you have to either crack an atom or burn something to charge the stupid thing.   Not zero emissions but rather distant emissions.  I love the technology, but like Apple people, the tesla people are just so brainwashed.

Thu, 11/19/2015 - 18:16 | 6815188 MarkD
MarkD's picture

Next up...... Oil tankers blown up and ISIS is blamed.

Thu, 11/19/2015 - 18:45 | 6815308 Lucky Leprachaun
Lucky Leprachaun's picture

Nonsense. Putin will be blamed.

Thu, 11/19/2015 - 18:25 | 6815227 Rockfish
Rockfish's picture

In the event a complete SHTF senerio that floating / stored oil will be worth something.  THere is no such thing as coincidence. 

Thu, 11/19/2015 - 18:56 | 6815355 Sudden Debt
Sudden Debt's picture

I wonder how long all those reserves would last if there was no more pumping going on.

Half a barrel for every person on this planet. Should last for a while I guess.

So what when it's full? Oil at 5 dollars a barrel? Water is 20 times more expensive then that!

Thu, 11/19/2015 - 19:05 | 6815386 kill switch
kill switch's picture

 

At 18,900,000 barels a day X 365= 6,898,500,000 a year that would be 6mo of supply for the 3,000,000,000 glut. Just in Amerika.

The U.S. increase follows two years of declines, and dampens hopes that the world's largest oil guzzler was permanently reining in its appetite for crude. The nation's oil use rose by 400,000 barrels per day to a daily draw of 18.9 million barrels; China's oil consumption grew by 390,000 barrels a day, to 10.8 million barrels a day, according to the BP figures released last month. Keep in mind I’ve had three vodkas with generous baileys chasers.

Thu, 11/19/2015 - 19:17 | 6815446 Rakshas
Rakshas's picture

FFS THANK YOU !!!  

I been saying that since this whole surplus thing started - seems people just can't do math no more, jeez us.  

 

Thu, 11/19/2015 - 19:21 | 6815475 TrustbutVerify
TrustbutVerify's picture

I want to make the oil glut gluttier by using less oil over time.  Just sayin'.  

Thu, 11/19/2015 - 19:24 | 6815497 Chia-Pet
Chia-Pet's picture

Putin will save oil market

Thu, 11/19/2015 - 19:31 | 6815542 Pwdrhead1711
Pwdrhead1711's picture

I just built a home on the water, overlooking Galveston bay. I'm on the west side looking east. To the right I see many tankers anchored to the south of Bolivar Island and to the left inactive container cranes. However, the sunrise is absolutely amazing every morning!

Thu, 11/19/2015 - 19:57 | 6815644 mijev
mijev's picture

"I just built a home on the water, overlooking Galveston bay."

According to the scientology of global warming that may be a bad move. Although I admit that I wouldn't be hanging around the next time a hurrcane comes that way.

Thu, 11/19/2015 - 21:53 | 6816032 Government need...
Government needs you to pay taxes's picture

IF your house is built on a jackup rig, you're good-to-go for that 50 foot rise in sea level.

Thu, 11/19/2015 - 19:49 | 6815613 shortonoil
shortonoil's picture

We are The Hills Group.org. Over two years ago we projected that the world's petroleum reserve would reach a thermodynamic state resulting for its depletion from which it would be impossible for the world to consume all the petroleum that was produced after 2012. We see no reason to change our position at this time.

Thu, 11/19/2015 - 20:22 | 6815697 directaction
directaction's picture

Big deal. The world ignites around 90 million bbls/day.

So what we're talking about, and getting all excited about, is a 33 day supply.

A month-long supply afloat or in ready storage ain't no glut, folks.

 

Thu, 11/19/2015 - 20:28 | 6815763 cheech_wizard
cheech_wizard's picture

It is when you have nowhere to put it.

 

Thu, 11/19/2015 - 22:07 | 6816073 pipes
pipes's picture

In a "just in time" world it sure as hell is.

Thu, 11/19/2015 - 20:49 | 6815839 Jeepers Creepers
Jeepers Creepers's picture

I'll be the contrarian, I don't see stupid cheap oil being a long term phenomenon in the new world.  It will be over $80 a barrel in the next 18 months, jmo.

Thu, 11/19/2015 - 21:42 | 6815997 kiwidor
kiwidor's picture

big oil inventory = buildup for war.  nothing more, nothing less.

Thu, 11/19/2015 - 22:36 | 6816146 StychoKiller
StychoKiller's picture

OR, lack of Worldwide demand!

Thu, 11/19/2015 - 22:52 | 6816185 agNau
agNau's picture

Running full tilt uses lots of energy.

Laying on the couch uses very little.

Economic activity is measured in energy consumption.

That's the point.

Introducing the couch potato economy.

Thu, 11/19/2015 - 23:49 | 6816351 onmail1
onmail1's picture

Abrahmic Religions say :

The dead shall rise from graves (petroleum)

and deliver judgement day to humankind (Nuclear war due to oil)

Fri, 11/20/2015 - 00:54 | 6816525 captain-nemo
captain-nemo's picture

It seems to me that the  gigantic stockpiling of oil mostly has something to do with direct manipulation of the oil price. At first (large oil companies) was trying to move the brent prices higher. When that didn’t work so well , it’s now all about preventing the oil prices from falling to much.  They have all joined forces.

Having monitored the live oil brent prices for a while it’s surprising to see how computer programs always kicks in to defend certain price key levels when the price falls. It’s actually obvious for anyone to see.

Stockpiling oil for a longer period of time to wait for price hikes has always been part of the oil price manipulation game, but now this method has become a guaranteed method  to lose even more money from oil as the future for oil looks grim.   

With todays oil prices, the oil fields operated by companies are hardly profitable. If the prices drops even a little further, the entire oil business will be a complete loss

I bet this is the reason why stockpiling of oil now is reaching all time high. Somebody is desperately trying to save the rest of the oil business no matter if they are going to lose more money in the process.

 

But,  how safe is it actually to have this oil stockpiled on large oil tankers all over the world?

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