A side effect of the Chinese Coronavirus - oil

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Interesting to see - a two-fer from gCaptain:

First - Europe:

Tankers Pile Up Off Europe as Onshore Storage Hits Limit
Dozens of tankers holding jet fuel and gasoline are at anchor in sea lanes around Europe’s main storage hubs, unable to discharge their cargoes as onshore tanks are full to capacity following the collapse in demand linked to the coronavirus crisis.

Nearly 1 million tonnes of refined products are parked on around 30 tankers off Europe’s coast, Reuters calculations found.

According to shipping data and trade sources, tankers have dropped anchor near to the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub and across parts of the Mediterranean as their cargo owners struggle to find buyers or storage tanks.

How's that "Just-In-Time" management strategy working for you now? Sure, very trendy in the 70's and 80's, cheap to implement, the company saves a bundle, share earnings go up, everybody is happy. UNTIL - something like this happens and then everything goes pear-shaped, the shit hits the fan and you are left with a dog's breakfast to sort out.

Second - the United States:

U.S. Crude Stocks Jump By a Record 19 Million Barrels – EIA
U.S. crude oil stockpiles rose by 19 million barrels last week, the biggest one-week increase in history, the U.S. Energy Information Administration said, as refiners throttled back activity due to slumping demand as a result of the coronavirus pandemic.

The build for the week ended April 10 was much larger than the Reuters poll calling for a 11.7 million-barrel rise and offsets some of the optimism that had bloomed as a result of a worldwide pact between oil producers to cut output sharply. Crude futures slumped on the news.

“Even though we knew it was going to be bad, it’s worse than people thought,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “You look at gasoline demand and it’s pathetic. If you were going to write a nightmare report about petroleum, this is it.”

Sure, consumption is down for now but the USA is now a net exporter of oil (thank you DJT) and we have the capacity to store our reserves for when the economy comes booming back. Any process will have its natural cycles of boom and bust. Prepare for them and you can come out smelling like roses.

I love the smell of capitalism in the morning...

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