A hunt for any storage space turns urgent as oil glut grows

first_imgTopics : A topsy-turvy market that has oil prices for October delivery at $31 a barrel has oil firms anxious to sock away millions of barrels now to sell at a profit later.Tank farms are full In Cushing, Oklahoma, home to dozens of large tank farms with combined space for about 76 million barrels, operators are fully booked, said traders. Storage there jumped by 5.7 million barrels the week before last, according to the latest US Energy Information Administration (EIA).While the government estimated there is available space, traders said Monday’s market drop indicated any unfilled tanks are under lease, and not available to new renters. The telephone lines have been ringing at Adler Tank Rentals in Texas as oil companies found a new use for steel tanks that had been left idle when shale producers stopped drilling – they want to use the tanks to store some of an oil glut that has overwhelmed the market and flipped US crude prices negative for the first time.Hundreds of millions of barrels of crude have gushed into storage worldwide in the past two months as the coronavirus-related lockdowns wiped out around a third of global oil demand.With oil depots that normally store crude oil onshore filling to the brim and supertankers mostly taken, energy companies are desperate for more space. The alternative is to pay buyers to take their US crude after futures plummeted to a negative $37 a barrel on Monday.center_img “The industry is really scrambling to source viable storage options,” said Stuart Porter, a manager at Adler Tank Rentals in Texas, which has shale companies lining up to potentially lease dozens of its 500-barrel steel frac tanks. The tanks can be lined up like dominos and filled at the well site by producers without a home for their oil.Converge Midstream LLC with millions of barrels of storage available in underground salt caverns outside Houston has gone from few takers to requiring one- to two-year contracts.”Quite honestly we were struggling for business. Now that the market has changed, everyone is our friend,” said Dana Grams, chief executive of Converge Midstream.The hunt for storage points to the magnitude of the collapse in demand for US shale and the huge volume of unsold oil to refiners who are cutting purchases.Last month, the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia threw in the towel on four years of self-imposed output curbs that gave US shale a price umbrella. The result was a drop in US oil prices to about $20 a barrel as Saudi Arabia and Russia pledged to pump full bore.For a time, it looked like prices would stabilize after the pair and other nations this month agreed to deepen cuts. But crude stocks in the United States rose by 19 million barrels overall the week before last, the EIA said, the biggest one-week increase in history, setting the stage for Monday’s historic decline.Floating storage In addition to the onshore glut, there are about 160 million barrels of oil sitting on tankers waiting for buyers. And at least six crude tankers carrying 2 million barrels apiece are en route to the United States from Saudi Arabia, adding to the alarm at the US Gulf Coast.It is not just crude looking for a place to go. State lockdowns have decimated demand for motor fuel. US gasoline demand fell 32% earlier this month compared with the same time a year ago, the EIA said.That glut is creating opportunities for some.At Caliche Development Partners, which stores natural gas liquids in underground caverns near Houston, CEO Dave Marchese may shift his plans and open a newly completed 3-million-barrel underground salt-cavern for crude oil or gasoline.”Gasoline has a pretty large contango right now,” he said, referring to prices five or more months ahead that are higher than current levels. But both fuels would require new pumps in its salt cavern, Marchese said, and he wants buyers to pay up for any upgrades.Shale producer Teal Natural Resources had one of its three crude buyers cancel a purchase agreement last month, sending it shopping for frac tanks. They are not cheap, Teal CEO John Roby learned after scouring the market.Storing a month’s worth of output would cost Teal about $20 a day per tank, or about $300,000 a month. At those rates, Teal would rather shut in wells, he said.Shutting off wells is not for everyone, though, because it can reduce future oil recovery, and may put a producer in breach of their lease contracts.Rentals for frac tanks have jumped from about $15 a day previously, a Texas oil marketer said.Another oil producer, Texland Petroleum aims to sell immediately whatever crude it can this month, said President Jim Wilkes. He is considering adding frac tanks to avoid having to pay to have his oil carried away in May.Joshua Wade, an oil marketer in Oklahoma, is in talks to reserve about 100,000 barrels of storage for May using a combination of frac tanks, on-system pipeline storage and smaller tanks that have been dormant on pipelines.But time is running out and costs are rising quickly.”A lot of people have been calling me now and saying ‘I wanna go out and buy 100,000 barrels in May and put them in a frac tank,'” said Wade. “I tell them the party started about a month ago and it’s now almost over.”last_img read more

Semenya claims 3rd WC 800m title, Burundi’s Niyonsaba gets silver

first_imgKenya’s Obiri denies Ayana world doubleKenya’s Hellen Obiri claimed consolation for her Olympic silver last year winning the women’s 5,000 metres world title.The 27-year-old produced a devastating burst down the back straight to leave defending champion Almaz Ayana trailing and went on to win in a time of 14min 34.86sec.Ayana, who had won the 10,000m gold in what was her first race of the season, took silver for Ethiopia in 14:40.35 with the Netherlands Sifan Hassan finishing third in 14:42.73.Ayana had decided to inject some much-needed zip into the pace with nine laps to run and only Obiri was able to match her.The field was suddenly splintered with Hassan, also fom Ethiopia but who came to the Netherlands as a refugee aged 15, leading a group of five contesting the minor medal.Ayana was unable to burn off Obiri as she had done her rivals in the 10,000m — which she won by over 46sec — with the Kenyan content to let her 25-year-old rival do all the pace-setting.Her strategy paid off perfectly as heading into the final lap she moved up onto Ayana’s shoulder and then delivered her coup de grace.Gold for Kenya!Elijah Manangoi wins the 1500m at #IAAFworlds in 3:33.61!!— IAAF (@iaaforg) August 13, 2017Kenya’s Manangoi wins world 1500m goldKenya’s Elijah Motonei Manangoi upstaged favoured teammate Asbel Kiprop to win gold in the men’s 1500m.Manangoi clocked 3min 33.61sec, finishing 0.38sec ahead of compatriot Timothy Cheruiyot.Filip Ingebrigtsen of Norway claimed bronze in 3:34.53.Kiprop’s bid for a fourth world title went up in smoke as he could only manage ninthShare on: WhatsApp London, United Kingdom | AFP |  South African Caster Semenya, dogged by gender accusations since shooting to fame in 2009, won a third world title in the women’s 800m on Sunday.Semenya, the defending Olympic champion and also world champion in 2009 and 2011, timed 1min 55.16sec, the fastest time of the year so far.Burundi’s Francine Niyonsaba, the Olympic silver medallist and world indoor champion, finished second in 1:55.92, with American Ajee Wilson taking bronze (1:56.65).Wilson went out fast, with Niyonsaba on her coattails and Semenya happy to sit back in the pack. The South African was fifth going through the bell in a fast pace of 57.98sec.Wilson made a move with 250 metres to run, Kenya’s Olympic bronze medallist Margaret Wambui immediately falling off pace.Hitting the home straight, Wilson and Niyonsaba were neck and neck before Semenya moved smoothly outside the lead duo and motored through the line for a convincing victory.?? Caster Semenya wins the 800m gold ? in a world leading time of 1:55.16 #BeTheNext pic.twitter.com/7eCbWdSfek— IAAF World Champs (@IAAFWorldChamps) August 13, 2017Semenya is back in the spotlight following a study funded by the IAAF and the World Anti-Doping Agency (WADA) that showed female athletes with naturally high levels of testosterone enjoy a competitive advantage of up to 4.5 percent over their rivals.The 26-year-old South African was one of a number of women taking medication to lower her testosterone level until 2015 when the Court of Arbitration for Sport (CAS) suspended an IAAF rule that enforced a limit on naturally occurring levels.Semenya has studiously avoided the controversy, instead concentrating on her track performances and she won a bronze in the highly competitive 1500m on Monday in the opening race of her ambitious bid for a distance double.Semenya, who stands to be awarded the 2012 Olympic gold medal after Russian winner Mariya Savinova was disqualified for doping, now has to await further meetings between the IAAF and CAS to discover if she again has to take testosterone suppressing medication.Hellen Obiri kills it in the last lap and takes gold in the 5000m!The Kenyan wins in 14:34.87!#IAAFworlds pic.twitter.com/ED6Kcv33X7— IAAF (@iaaforg) August 13, 2017last_img read more