While oil prices have jumped about 50% in recent weeks, there appears to be no real reason for the move other than pure speculation and billion-dollar market cash infusions from unknown plunge protection teams.
But as the mainstream media continues to tout non-existent reduction agreements between oil producing nations, the following evidence suggests that the world remains awash in oil, so much so that there is no space to store it… anywhere on earth.
The following report from Zero Hedge explains just how much oil is currently sitting in limbo while suppliers try to figure out what to do with it:
Last week we revealed what we thought was a “shocking photo” of nearly 30 oil tankers caught in a traffic jam off the Iraqi coast, an indication of just how much excess oil is currently parked offshore.
But the photo above, meant to do DB’s thesis justice, was nothing in comparisons to what Reuters would reveal today.
Because as ports struggle to cope with a global oil glut, huge queues of supertankers have formed in some of the world’s busiest sea lanes, where some 200 million barrels of crude lies waiting to be loaded or delivered, Reuters reports today.
The vessels, filled with oil worth around $7.5 billion at current market prices, would stretch for almost 40 km (25 miles) if formed up in one straight line.
Something not quite so theoretical, and yet almost identical taking place right now, is shown in the photo below, which shows VLCC supertankers traveling between India and Southeast Asia, courtesy of Reuters.
And while the market is for now clearly ignoring the unprecedented accumulation of oil in offshore storage, a bearish indicator of just how much oil will hit markets if and when prices continue rising or when collapsing contango makes it no longer economic to hold for many it is an all too real daily existence.
The unprecedented number of ships at sea filled with cargo and just waiting for the signal to offload is also causing congestion between the main producer and consumer hubs.
Almost all supertankers heading to Asia pass by Singapore or adjacent facilities in southern Malaysia, the world’s fuel station for tankers and also a global refinery and ship maintenance hub.
Shipping data shows that some 50 supertankers are currently anchored in or close to Singaporean waters for refueling, maintenance or waiting to deliver crude to refineries or be used as floating storage.
This can be seen in the following Reuters photo of oil tankers lining up on the eastern coast of Singapore.
While we struggle to figure out why the price of oil has sky rocketed, one can’t help but think there must be some level of manipulation involved.
In a separate report Zero Hedge revealed that the Federal Reserve met with banks who are holding tons of energy related toxic assets on their books and basically told them to hide the losses for as long as they can. Wells Fargo, in particular, reported today that they are on the hook for some $32 billion in exposure to junk rated oil and gas companies.
The reports confirm what resource strategist Marin Katusa said would happen just last month when he warned that banks and energy companies would first extend their debt as far out as possible, and then simply pretend it didn’t exist. The consequence of the manipulated numbers and continued supply glut, according to Katusa, means that oil will stay lower for longer:
Because what banker in their right mind wants to get dirty and actually operate an oil field?
So the debt will be amended, extended and then they’ll pretend.
… Because you can’t just shut down an oil field. You have to reclaim those wells, which means you have to shut them down and environmentally reclaim them… and it costs more to do that today than what the actual value is.
The bankers know that.
… With innovation, in the Western world, costs will decrease and the bankers have no choice but to amend, extend and pretend the debt.
So they’re going to go lower for longer.
The Russian energy minister said this week that he is confident oil prices will be at $65 by 2017.
Yet, we remain skeptical until the massive supply glut is cleared out.
While we’ll stop short of attempting to forecast what happens next with oil prices, the evidence suggests that something is fundamentally wrong in the pricing mechanism for global oil prices.
If oil were to drop back to the January lows of around $26 per barrel, then all of those defaults in the energy industry may very quickly be realized.
And that has the potential to crash equities markets as a whole, just as we saw during the first few weeks of 2016.
As we noted earlier this year, such a crash in oil prices, or even continued low prices at current levels, could cause the most destructive economic situation since the Great Depression:
For the first time in 18 years, oil exporters are pulling liquidity out of world markets rather than putting money in. The world is now fast approaching a world reserve currency shift. If we see 8 to 12 months at these oil prices; U.S. shale industry will be wiped out. The effect on junk bonds will cascade to the rest of the stock market and U.S. economy.
…and this time there will be nothing left to catch the falling knife before it hits the American economy right in the heart. Not the FED nor the U.S. government can stop what’s coming. Liquidity will freeze up, our credit will be downgraded, the stock market will start to collapse, and then we can expect the FED to come in and hyper-inflate the dollar. This will cause the world to finish abandoning the world reserve currency in the last rungs of trade. This will be the end of the petrodollar.
We know the global economic system and the U.S. economy in particular is under extreme stress.
We also know that it simply can’t last. That’s simple arithmetic.
The only question at this point is: what will be the catalyst that sets the whole thing aflame?
the whole damn thing is a sham. It is coming down one way or the other. It doesn’t even matter why anymore. What matters is how you will manage and survive when it does.
25 miles of super tankers loaded with oil backed up because every last storage facility around the world is full. But don’t worry folks, its just “PEAK OIL” manifesting and masquerading as a an OIL GLUT !!!
BTW, someone here here tried to tell this community years ago that the world was AWASH in oil; much to the dismay and vocal opposition of the oil & gas know nothings. Hmmm, wonder who that was ….
Its in the archives. 🙂
The Tankers are sitting there, waiting to load, but since there are no buyers, they sit. This is a complicated issue, because many of these vessels are under financing, and if they are not making cargo loads shipments, they are not making their monthly vessel payments. Its the banks that financed them that are also taking a hit. That’s why the Oil Co’s and elite start wars, to use more energy consumption. They are whores so let them die.
~WWTI… Off Grid, 100% Solar here. F-em.
How does the Satellite Photo know if the Tanker are empty or full? This is a BS Article as far as facts. If these Tankers were sitting off the coast of the US, ready to unload, then I would think different. What do you think? BS??
Loaded. In a word: “contango”. 🙂
Can SOMEONE please explain wtf this guy has seen oil prices go UP 50% and “explode”???? Stil around $40/barrel. Poorly written, total BS
Any thoughts on converting all these damn dinars I’ve got into China yuan cus on the 19th it’s gonna be gold backed and where can it be done
Why not skip the middleman and buy gold with your dinars or sell the dinars and buy gold.
That’s Why you are a Genius. Go right for the Gold. That has to make Gold surge, raising Silver prices. Love it..
Holly smokes the Neighbors shine over here is excellent. He is itching to go commercial with his brands, fruit flavors. I’m guiding him. lol Need to open up a tasting room, like the wineries have…
“The world is now fast approaching a world reserve currency shift. If we see 8 to 12 months at these oil prices; U.S. shale industry will be wiped out. The effect on junk bonds will cascade to the rest of the stock market and U.S. economy.”
Kinda hate to say it … but … this needs to happen.
Somewhere along the line, all of us are going to suffer to a certain degree from this fiasco that THEY created.
In other NEWS – It appears … Fat Man Alex Jones is blabbering up storm about Saudi Arabia being the ones who were behind 9/11 nonsense.
Anybody who has a bad habit of watching/listening to him. Please do yourself a favor and TUNE him OFF!
I don’t even watch the financial news anymore.
The markets are so fucking rigged, there is no such thing as fundamentals anymore.
Acid, I said that 6 years ago. Its not based on fundamentals. That’s what I learned about back in my day trading days. It was emotions not fundamentals, and the rampant changing of accounting methods to determine value, is cooking the books for the desired outcome. Accounting firms rigged the books. I was more momentum trader like the machines are doing today. $20K blocks of stock traded multiple times a day, In and out. That was fun. I was watching 4 monitors…
“huge queues of supertankers have formed in some of the world’s busiest sea lanes, where some 200 million barrels of crude lies waiting to be loaded or delivered”
This article is a JOKE. The world gulps up nearly 90 million barrels of oil per day. So 200 million barrels is less than 3 days worth of product. oooh wow; a real GLUT with almost 3 days worth.!!!! LOL
90% of the oil consumed is not transported by ship.
There are 520 million barrels of storage available in the USA. It is all full. It is normally never more than 40%.
Most of the oil producers I know have had to cut their workforces by more than 50%. Some are just plain gone. Many are holding on by a thread. In a few more months they will mostly be gone. Most are producing and just pumping oil into the pipelines as much as they can. As pumps breakdown, they dont repair them so after a while production will slowdown. The problem is that when it comes time to increase production again, it aint gonna happen. It will take years to gear up and increase production.
Tax Day, My Fellow Amerikkkans!!!!
I love getting 30-50% of my fucking money stolen by the government every payday.
I love the fact that baby boomers are getting TWICE AS MUCH OUT OF FUCKING SOCIAL SECURITY AS THEY PUT IN WHILE MILLENNIALS WILL GET MUCH LESS OUT THAN THEY PUT IN. TELL ME ABOUT THE LOW MILLENNIAL WORK ETHIC.
I love the worthless waste of my money on mandatory bullshit insurance scams, 401k scams, and the student debt crisis.
THAT’S RIGHT PEASANTS, WORK YOUR WHOLE LIFE AWAY TO MAKE OTHER PEOPLE FUCKING RICH AND SUPPORT GOVERNMENT WASTE.
EVERY FUCKING PAYCHECK…RETIREMENT CONTRIBUTIONS, RETIREMENT CONTRIBUTIONS, SAVE FOR RETIREMENT, HEALTH SAVINGS ACCOUNT, YOU CANT TAKE YOUR OWN MONEY OUT OF YOUR OWN ACCOUNTS WITHOUT A TAX PENALTY.
IT’S MY MOTHERFUCKING MONEY!!!!!!!!!!! I EARNED IT!!!
WORK YOUR WHOLE FUCKING LIFE AWAY TO SAVE FOR RETIREMENT SO YOU CAN DIE.
HAS TO BE MANDATORY PARTICIPATION IN SOCIAL SECUURITY (UNLESS YOU ARE A CONGRESSMAN) TO PROTECT PEOPLE FROM BAD INVESTMENT PLANS IN THE PRIVATE SECTOR…AS I’M PAYING MORE INTO THE FUCKING SOCIAL SECURITY THAN I’M GOING TO GET BACK.
WHAT THE MOTHERFUCK SENSE DOES THAT MAKE????? IT MAKES PERFECT NONSENSE, THAT’S WHAT!!!!!!!!!!
Why is my fucking healthcare tied to my job? You go to work, you get a fucking salary to do what you want with, end of story.
Company requires mandatory medical checkups that drive the price up. Can’t buy insurance out of state, have to be in preferred provider networks that eliminate competition and drive the price up.
3% of college graduates ever took economics. It sure to shit shows, don’t it?
HOW MUCH FUCKING LONGER CAN THIS SHIT LAST?????
The conceptualization of “work ethic” is a social control mechanism meant to keep the stupid sheeple tax cattle working hard to make other people rich and support the fucking government.
$118 billion a year to illegal Mexicans (the true number is unequivocally much higher).
$20 trillion to blacks since the Great Society.
How many Community Development Block Grants does it fucking take to admit that races with an average IQ below 90 cannot fucking economically develop jack shit???
BLACK OWNED BANKS LOAN MONEY TO BLACKS AT A LOWER FREQUENCE THAN WHITE OWNED BANKS.
GET THE FUCKING MUSLIMS AND MEXICANS THE FUCK OUT OF OUR COUNTRY YOU DUMBASSED OLD SHITS!!!!!!!
So tell us how you really feel. I would like to know who you would like to see in the White House.
In psychology we have Maslow’s hierarchy of needs.
I disagree with the theory.
I would place self-actualization in between safety and physiological; in particular, problem solving, acceptance of facts, and lack of prejudice (meaning not that I’m not a racist, but that I do not prejudge a situation without knowing all the facts). Self actualization is more important than safety. Your safety is not guaranteed and is mostly an illusion anyway.
An infant isn’t born self-actualized. Basic needs must be met for the child to grow, develop and mature. Self-actualization is a process that requires insight and self-reflection.
IF SOUTH AFRICA IS SO RACIST
WHY ARE THERE 150000 REFUGEES FROM OTHER BLACK AS NIGHT AFRICAN COUNTRIES THERE?
WHY DID BLACKS FLOCK TO THIS APARTHEID STATE?
WHY DIDNT BLACKS STAY IN BLACK CONTROLLED STATES WHERE YT COULDNT DISCRIMINATE AGAINST THEM?
BLACKS ARE PARASITES
THEY COME TO WHITE AREAS, DESTROY THEM, THEN DEMAND YT BUILD MORE CIVILIZATION FOR THEM TO DESTROY
HOW MANY MORE DECENT WHITE CITIES WILL BE DESTROYED BY BLACK UNDERTOW?
I ONLY WANT TO LIVE AROUND WHITE PEOPLE?
The Fed to hyper-inflate dollars. More destruction right around the corner. When the price of gasoline shoots over $5.00 a gallon that will keep most people right where they are located. The price went from 1.57 a gallon here to 1.99 nearly overnight. It never did get as low as many were projecting. Can you say RIPOFF and not hit the nail on the head. No matter, free gouging is an American trademark. Yeah, the latest is that a further decline in price is expected. This nation no longer needs oil and all of its derivatives or the destruction it brings to all of the living organisms on Earth. The evil military industrial pharmaceutical complex thinks otherwise.
Stanley Meyers invented a form of energy making the need for oil obsolete. He died after “probably” being poisoned.
Go to the Internet and Google
Stanley Meyer water fuel cell energy crisis hoax
Stanley Meyer lectures 1992
Stanley Meyer’s buggy
There are a number of short and some longer videos that will wake you up to the reality that if not for the Rockefeller monopoly on gasoline, you would be able to fill your tank with a little water from your tap and drive anywhere you wanted free of charge, while actually improving the quality of the air.
The Rockefellers were dirt poor. If not for the infusion of money by the city of London, Trillionaires Banking cartel, they would still be selling crap “Medecinal” tonics to gullible dummies, oh, they still are. It’s called Big Pharma, Rockefeller (Rothschild) money established the AMA, American Medical Association in order to push out Natural Medical Doctors. Rockefeller charities that donate to Universities are not altruistic. They are greedily insuring by bribery that no other form of medicine is taught except cut, burn, poison: surgery, radiation, chemical poisons have replaced the foods, medicinal herbs, long walks, lots of healthy sunshine and a mother’s and father’s love with a concoction of elements designed to keep you sick, weak, and dependent; addicted to their poison for maximum damage and maximum profits. They despise you. They only want to use you toward their own means.
Be nice to your doctor. He, too, is a victim of this conspiracy. Or just find a good Natural Homeopathic Doctor, herbalist, traditional Chinese Medicine Doctor and Acupuncturist, or Chiropractor, or any of the many alternate health practitioners. There are MDs who do use no barbaric methods but you will have to do due diligence to find them. Check out the free series “The Truth About Cancer. Com”. It will be up free for a short time before it will be taken down.
B from CA,
since you know about Stan Meyers, I will assume you know about all the others who have met a similar un-timely death for there research, what you may or not know is that there is MANY types of free energy and the government know abut and to date is using them in a military fashion ans still experimenting with some of them. they (feds and military) will never allow free energy to overtake OIL BECAUSE the WHOLE world is dependent on oil and it will collapse ( like it isn’t on the way down) IF we get a world collapse you will probably some of this free energy stuff being released to the public.
Stanley Meyer believed he was protected by angels. Protected he may have been. He lived long enough for people to learn about his invention. Isaac Newton was Religious. Some people are here to do what they do. Eventually these discoveries will be put to use.
When I grow up, I will discover something that will save the world from hardship, illness, and hunger. Then I will haggle for the highest price I can get out of the bastards, cause they will never allow anything like health, peace, and prosperity. Ha ha. And,yes, I know. There are many suspicious deaths of people who thought they could make the world a better place. If they don’t kill your body, they kill your reputation or career.
This nothing new. The refineries can refine it fast enough.
TPTB will play with the price. They have been doing for years why stop now?
Britain’s Jeremy Corbyn Says It All In 44 Seconds
keep in mind that between 2006-2012
two thirds of US corporations paid NO taxes
how much did you pay in those years?
think there isn’t class warfare going on?
still believe in trickle down economics?
how is that workin’ fer ya ???
Warren Buffet stated that class warfare is going on
and he said “MY side is winning”
and FTW give us a break please
there are 28 pages of a report on 9-11 that have been kept secret by both Bush and Obama
everyone knows the Saudi’s were involved
thats why those pages are being kept from the public
the only question is
how high up were those involved
I’d be willing to bet at least some members of the Saudi royal family at least financed the murders of 3000 Americans
Yes … like most things in the Government, there are plenty of “secrets” that are kept from public view. I’m not saying Saudi Arabia didn’t have knowledge or didn’t have have any involvement. What I do know is … that Saudi Arabia is NOT the only one involved as Alex Jones is blabbering about.
Mike Rivero does a nice, simple write up about the questionable Saudi Arabia involvement.
Please take a gander at it –
Fuck alex jones- hes a shill. That said, the saudis WERE involved in 9/11. Same as no one died at sandy hook. You claim to be so “awake”, yet to blind to everything around you.
Apparently several readers on this site have forgotten or don’t know about the oil shocks of the 1970’s. After accounting for inflation the price of oil was far higher then than now. Shortages were manufactured then allowing oil corporations a way to dramatically raise prices. Today, as then, there are no shortages, so something has to be created to help increase prices. Of course there is manipulation, in a normal and properly functioning market, prices are controlled by the law of supply and demand. This is plainly not the case now. Wall Street sees lower energy prices as a bad thing because it’s not good for their stocks, etc., even though the greater good benefits by lower prices. Watch and see where prices go, that will show who interests are being served. Don’t count on the politicians and bureaucrats to rectify market fraud, you can probably guess why. But I bet if small business was doing what major corporations do all the time someone would scream about price gouging.
There are actually easy ways the middle class can recover power. To name four; believe or not, one is to completely stop voting, so that the only group who still votes in large numbers are lower socio-economic people, politicians will be deprived of middle class legitimacy (besides, gov’t has shown repeatedly no interest and even hostility to the middle class anyway), the second is take all your money out of banks except the bare minimum to pay bills, the third is to only buy what is absolutely necessary, and the fourth is for the middle class to find a way to unite in a bloc to serve our common interests (this is why the gov’t maintains a divide and conquer policy, regardless of party). We don’t have vast wealth or influence, but what we do have are numbers, if we can use that to our advantage the people would truly rule. After all, isn’t that what our politicians claim – gov’t of, by, and for the people?
Getting back to oil prices; when the market becomes so glutted by oil so that prices have no choice but to drop significantly you will likely also see a very big overall market “correction” to the down side. Bide your time, you are about to see if things appear better or things get much worse. Most people will not see actual tangible improvement, just propaganda and advertisement saying it is.
I want to know how you get a gun stolen in a Home Invasion? Isn’t the gun suppose to be on your hip or in your hand when they break in? He was probably on one of his security Guard long naps, clutching his fish crackers, dreaming about his next bi-hourly key punch round. Shaken them door handles. Back to the fish crackers.
Just busting on ya brave.. We still like you.
Don’t worry folks their running out of tankers and no one wants to cut production. If they keep it up, oil will be $5 a barrel but the shipping cost will be $49 a barrel
Hire BP. They know how to get rid of that extra oil.
I have been following this situation on MarineTraffic.com for quite a while. I recommend it.
Wow, 200 million barrels waiting to be loaded. That’s like a 2 day supply for the world…
Without a doubt production is currently exceeding consumption. Production is starting to fall however and consumption continues to rise.