Hugo De Stoop, CEO at Euronav, talks a boom in tanker demand as an oversupply of oil leads to a crunch in storage capacity. Euronav is the world’s largest publicly traded tanker company.
An unprecedented collapse in U.S. oil prices has prompted energy market participants to reflect on the difficulty and costs of storing crude.
At a time when the coronavirus crisis continues to crush global demand, the world is awash with oil and quickly running out of places to put it.
It resulted in the May contract for U.S. West Texas Intermediate futures tumbling into negative territory for the first time ever on Monday. Remarkably, this meant traders were effectively having to pay to get oil taken off their hands.
The May WTI contract, which expired on Tuesday, settled at $10.01 a barrel. It had closed at a discount of $37.63 in the previous session.
Wild swings in the May contract for WTI this week were thought to have been exaggerated by its imminent expiration, leaving many concerned the situation could repeat itself when the June contract expires next month.
The contract for June delivery of WTI traded at $10.85 on Wednesday morning, down over 6%. It had plummeted more than 40% in the previous session.
Meanwhile, international benchmark Brent crude stood at $17.01, nearly 12% lower.
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