Crude tanker backlog in U.S. Gulf eases on robust imports

tanker_crude oil

A backlog of tankers off the shores of the U.S. Gulf Coast that swelled in the final quarter of 2015 is easing, with the volume of crude waiting to discharge declining by more than half in just a month’s time.

There currently are 27 vessels offshore in the U.S. Gulf Coast waiting to discharge an estimated 15 million barrels of crude, compared to 36 million barrels at the start of December, ClipperData said.

There are typically 10 million to 12 million barrels of oil waiting to discharge at any one time, Clipper said.

The decline comes as December crude imports are on track to hit their highest weekly average since September 2013, so far averaging roughly 7.9 million barrels per day, according to data from the Energy Information Administration.

Import data released on Wednesday will include seven additional days for the full month of December.

The narrowing of the contango structure in the futures markets – where later barrels are at a premium to the prompt month – may be contributing to discharges.

The discount for prompt West Texas Intermediate (WTI) relative to the next month has rebounded from a low of a $1.72 a barrel in December, trading between a discount of $1.13 to $1.23 a barrel in January.

At the same time, end-of-year taxes in Gulf Coast states may have prompted more barrels to remain offshore until the start of the new year.

“You can make $1.50 selling crude next month and you have a tanker on a time charter and are trying to minimize onshore inventory for tax reasons,” Dominic Haywood of Energy Aspects said, regarding the decline in offshore vessels.

Source: Reuters

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