Oil Tankers Store 140 Million Barrels, JPMorgan Says

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Jul 2009

Global inventories of crude oil and refined products stored offshore rose to 140 million barrels, JPMorgan Chase & Co.'s head of commodities research said. Stockpiles among developed nations have increased by 100 million barrels since the beginning of the year, JPMorgan said in a quarterly report. As storage capacity on land fills up, surplus fuel is being kept onboard tankers at sea. Many traders are keeping crude for delivery later this year or next, when futures prices are higher. "While OPEC production cuts and increased global refinery utilization rates in the past several months have cut into the large crude overhang, lagging demand has pushed the crude surplus into product inventories," said Lawrence Eagles, JPMorgan's New York-based global head of commodities research. Crude and product stockpiles are at a "daunting" 2.78 billion barrels in the Organization for Economic Cooperation and Development, JPMorgan said. Hopes for an economic recovery have nonetheless boosted prices, which are up 44 percent since April. "Expectations for stronger demand in the second half of 2009, as the impact of economic recovery manifests as increased oil consumption, will help bring the market back into balance," Eagles said. JPMorgan predicts that crude futures traded in New York will average $60 a barrel this quarter, $65 in the fourth, and $67.50 a barrel in 2010. Oil for September delivery traded at $63.49 on the New York Mercantile Exchange, as of 8:52 a.m. London time.

Source: ALARIC NIGHTINGALE, BLOOMBERG