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Empty oil tanks at key storage hub show speedy demand rebound

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thackney:
Empty oil tanks at key storage hub show speedy demand rebound
https://www.houstonchronicle.com/business/energy/article/Empty-Oil-Tanks-at-Key-Storage-Hub-Show-Speedy-16262117.php
June 21, 2021

...For the first time since before the pandemic, empty tanks are being offered for lease at Cushing, Oklahoma, the delivery point for West Texas Intermediate oil futures. At least 1.4 million barrels of storage is up for rental starting in July, for roughly 12 cents per barrel a month, said Steven Barsamian, chief operating officer at storage brokerage Tank Tiger. That’s a stark contrast to at least 60 cents charged when there was little space left about a year ago....

...Meanwhile, shale producers are sticking to their pledges to focus on balancing their books and boosting returns to shareholders, rather than increasing output. U.S. production is 15% below its peak last year, limiting flows to the storage center.

So, traders are rapidly draining their storage tanks to supply refineries with every barrel of crude feedstock they need.

Empty tanks are typical of a market where demand is outpacing supplies and traders are getting a premium on the nearest deliveries, making it unprofitable to keep oil in storage -- a pattern known as backwardation....

Smokin Joe:
As the price goes up, and it will, wells will come back on line in some areas, and new drilling will pick up... Wait for it. In the meantime, I don't blame operators for holding back, especially with the greenie shenanigans going on in the financial arena (major banks not funding fossil fuels over 'climate change'), and the hostility of this administration toward traditional fuel sources.

IsailedawayfromFR:

--- Quote from: Smokin Joe on June 21, 2021, 05:10:56 pm ---As the price goes up, and it will, wells will come back on line in some areas, and new drilling will pick up... Wait for it. In the meantime, I don't blame operators for holding back, especially with the greenie shenanigans going on in the financial arena (major banks not funding fossil fuels over 'climate change'), and the hostility of this administration toward traditional fuel sources.

--- End quote ---
This is particularly true for offshore activities, with the huge costs and long timelines.

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