Current Crude Pricing and Outlook
Frontline, and others, have reported 30 - 40 very large crude carriers (VLCCs) and super tankers (1 - 2 million bbls of crude) being used as floating storage ... holding about 1+ days of global supply ...
When this "floating storage offloads into the market ... the crude price has to drop ... the current run up I suspect is all about
(1) the unknown outcome of the may 28th OPEC meeting,
(2) the ongoing contango playing out at the global storage facilities (like Cushing, OK),
(3) supply bottlenecks ( see: Crude Supply and Bottlenecks), and
(4) supply threats ... like Nigeria rebel attacks ...
Given the rise in the price of crude ... I don't believe OPEC (about 40% of global production) will feel the need to reduce supply further.
The fly in the ointment is the actions of the Nigerian rebels continuing attacks on the oil infrastructure, and with assault craft too ... Every attack takes awhile to cleanup and repair before return to service. As yet, no one is identifying where the rebels are getting the weapons, explosives, and money necessary to carry out the ongoing attacks from? ... Hmmmmmm!