Crude oil tanker rates likely to remain low until petroleum demand increases (10/21/2020)

In March and April 2020, the reduced demand for crude oil and petroleum products because of responses to COVID-19 led to a sharp increase in global crude oil inventories. As onshore inventories increased, market participants turned to using oil tankers to store oil, which is typically more expensive than onshore storage. The drop in global oil demand and increased need for floating storage occurred at a time when global crude oil production (specifically from members of the Organization of the Petroleum Exporting Countries, or OPEC) and demand for crude oil tankers was high, driving up tanker rates. Tanker rates have declined significantly since peaking in March because crude oil production and demand are now more balanced. However, oil inventories in floating storage remain relatively high. ... More »