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Dozens of oil tankers cluster off the coast of Texas due to oil price fall
- phreeza 11y agoSo am I right thinking these ships are fully loaded? If so, I guess the implicit assumption is that the price will rise back faster than the costs of having an idle ship sitting in the water? If the market was efficient, wouldn't it be irrational for the holders to assume this?
- tetrep 11y agoi don't think you fully appreciate how cheap (relatively) boats are, it's why trade between the US and China works even for the cheapest of goods.
- refurb 11y agoThis is a great point. Operating a tanker ship might appear expensive (hundreds of thousands per day), but when you spread that cost across the cargo it holds, it's actually pretty cheap. I remember hearing that shipping something from China to the US can be under $1 per pound.
- greeneggs 11y agoI think $1/pound is too high. The Shanghai Containerized Freight Index (SCFI) has it at $1102 to ship a forty-foot container (FEU) from China to the US west coast [1]. A 40' container has a 61,200 lb payload capacity [2]. That's 1.8 cents/pound. How close the cost gets to this depends on the payload density, but $1/pound seems high. [1] http://www1.chineseshipping.com.cn/en/indices/scfinew.jsp http://www1.chineseshipping.com.cn/en/indices/scfinew.jsp [2] http://www.dsv.com/sea-freight/sea-container-description/dry-container http://www.dsv.com/sea-freight/sea-container-description/dry...
- refurb 11y agoI didn't know the exact number that's why I put "less than $1/pound". You are correct though. If you look at some of the products like fruit that we get from Asian, the cost per pound would have to be pennies or else they couldn't charge $2/pound for the produce in the US.
- narrowrail 11y agoAccording to the recent earnings report from North American Tanker [0], their cost per day is $12K, while they charge $35K/day on the spot market. This is for their Suezmax, which can hold 1M barrels of crude. [0]Warning PDF:http://hugin.info/201/R/1966091/717954.pdf http://hugin.info/201/R/1966091/717954.pdf
- michaelt 11y agoIf suppliers don't want to trade at current prices, the ship is going to be sitting idle somewhere - and it's more profitable to sit idle near America while full than to sit idle in the Gulf of Oman while empty.
- TorKlingberg 11y agoThe alternative would be land-based storage tanks. They also cost money. This happens sometimes. Example: http://www.telegraph.co.uk/motoring/news/6601779/Oil-tankers-parked-off-British-coast-as-speculators-wait-for-prices-to-rise.html http://www.telegraph.co.uk/motoring/news/6601779/Oil-tankers...
- barney54 11y agoThe market is efficient, but only on the long run. People making decisions like this make the market efficient by storing oil when it is cheap (or when it appears to be cheap).
- s73v3r 11y agoI fail to see how deliberately not doing something with a resource makes anything more efficient.
- JshWright 11y ago"Efficient" has a very specific meaning in this case. https://en.wikipedia.org/wiki/Efficient-market_hypothesis https://en.wikipedia.org/wiki/Efficient-market_hypothesis
- jeffcoat 11y agoIt's obvious that moving oil in space helps, right? You move the resource from a place it's relatively plentiful to a different place where oil is relatively scarce. Say, from the Persian Gulf to Australia. The same thing is happening here: These ships are trying to move oil from a time when oil is relatively plentiful to a time when it's relatively scarce. It's riskier, but if they succeed, everybody wins: they make money, and they do it by lessening that future scarcity.
- barkingcat 11y agoOften ships sit loaded for months on end (sometimes due to customs or duties / ownership issues). There's also a proximity issue. If a loaded ship is sitting close to the states but in international waters, it's easier to get the load back into the states. If you leave the cargo in a storage facility somewhere you still have to pay for the storage, and in addition the transit + time when you actually want to use/sell/offload it.
- jakozaur 11y agohttp://www.nytimes.com/2015/11/12/business/oil-tanker-traffic-jam-off-texas-is-viewed-as-sign-of-oversupply.html?_r=0 http://www.nytimes.com/2015/11/12/business/oil-tanker-traffi...
- zerstroyer 11y agoSo is the risk of an tsunami so low there that it is considered safe to have fully loaded oiltankers idle off the coast, or would this be not a problem for those tankers?
- dmm 11y agoI think tsunamis are much lower over deep water.
- anc84 11y agoA tsunami is harmless on the ocean. It is only manifesting itself when coming into shallow waters.
- dsfsdfd 11y agoMight be more at risk from a freak wave than a tsunami - but still v.unlikely - bet they are insured
- abricot 11y agoAnd the companies who own them are completely legally insulated from any risk Source: I watched West Wing
- dmethvin 11y agoThe risk near Galveston would be primarily from hurricanes.
- PudgePacket 11y agoThe way tsunamis affect different locations is quite interesting! The wave length (distance between two peaks/troughs) at sea can be hundreds of kilometers long, a tsunami could pass under your tiny boat while out at sea and you wouldn't even notice it. It's only as they approach land that the shallow depths force the wavelength to shorten, forming the giant waves we usually associate with tsunamis. [1] http://www2.scholastic.com/content/images/articles/sn_ts/sn_ts_031111_diagram.jpg http://www2.scholastic.com/content/images/articles/sn_ts/sn_... [2] https://en.wikipedia.org/wiki/Tsunami https://en.wikipedia.org/wiki/Tsunami
- deleted 11y ago[deleted]
- Gustomaximus 11y agoCan i just say thanks for sharing this map. I'm having a blast looking around the world at various ports! Edit: My favourite so far is a oil rig who's description photo is them on fire: http://imgur.com/9VpE78V http://imgur.com/9VpE78V
- phreeza 11y agoThe density map is also fascinating. You can make out the offshore wind fields in the north sea.
- Cthulhu_ 11y agoIt's also interesting to see how busy the waterways in / around the North Sea / European west coast are compared to the US. But then, the US is a large landmass and probably has a lot more ground transport (e.g. trains)
- ThrustVectoring 11y agoThose waterways fill the same sort of role that barges on the Mississippi fill in the US.
- cbhl 11y agoIIRC, most stuff gets around the US on 18-wheelers using highways. (Train infrastructure in the US is laughably terrible.)
- Symbiote 11y agoThat's not the case, freight trains in the USA are excellent. European railways prioritise passengers, but much freight moves by water.
- showerst 11y agoMost stuff does indeed get around the US by truck: http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/freight_shipments_in_america/html/entire.html http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/pub... I've also heard our freight rail infrastructure described as excellent through, so maybe if you compared it to other countries in cost per ton/mile it would come out well.
- padobson 11y agoOne of my favorite board games is Container[1]. The game is great because the economy develops with each player taking on different levels of responsibility in different roles: production, storage, and shipment. And it's not at all uncommon to watch players keep fully-loaded ships at sea while they wait for the opportune time to sell the goods on board. [1]http://boardgamegeek.com/boardgame/26990/container http://boardgamegeek.com/boardgame/26990/container
- ralphael 11y agothanks for this, didn't know it existed!
- cmaggard 11y agoIt's amazing, but at the same time it's OOP with a reprint anytime soon being unlikely. It would probably be very easy to rig up a print-and-play copy however.
- ralphael 11y agoebay here I come!
- pessimizer 11y agoNot likely to have success there, either, but here's a list of sellers. https://boardgamegeek.com/geekmarket/browse?objecttype=thing&objectid=26990 https://boardgamegeek.com/geekmarket/browse?objecttype=thing... Where can I find this for less than $150? https://boardgamegeek.com/thread/1338344/where-can-i-find-less-150 https://boardgamegeek.com/thread/1338344/where-can-i-find-le...
- ozim 11y agoLooks like same near Netherlands: http://www.marinetraffic.com/en/ais/home/centerx:3/centery:51/zoom:10 http://www.marinetraffic.com/en/ais/home/centerx:3/centery:5...
- ComputerGuru 11y agoAnd here I was expecting a news article or press statement! It was an incredibly pleasant experience to see the facts from the headline firsthand, no spin attached. Thank you, OP!
- DonHopkins 11y agoThanks for this link! I'm in Amsterdam, and I really wish I knew about this web site during Sail from August 19-23! It happens every four years. It would have been a great way to identify all the ships we saw, especially when they were all moored in the IJ during the fireworks. Is there any way to replay historic information? https://vimeo.com/141042923 https://vimeo.com/141042923
- ehosca 11y agohttp://www.zerohedge.com/news/2015-11-12/something-very-strange-taking-place-coast-galveston http://www.zerohedge.com/news/2015-11-12/something-very-stra...
- Nicholas_C 11y agoWhat does the normal level of tankers idling outside of Galveston look like?
- mattlutze 11y agoIt does seem that that would be the pertinent question. If you look at the density map layer option, you can crossfade between 2013 and 2014. I didn't sign up for an account, but it looks like in 2014 at least they saw an increase in traffic where the tankers are now parked. But, last year there was also significantly more traffic through that port in general, so it may not be that the percentage of temporarily held ships as a function of total traffic changed?
- HiLo 11y ago(There's also a lot more energy products coming out of that region now, hence more vessels.)
- washedup 11y agoThis sort of phenomenon can be seen lots of times throughout the past decades. Anytime oil falls below a certain price, it becomes cheaper to pay to keep the ships running offshore under the assumption that oil prices will increase in the near term.
- toomuchtodo 11y agoIt's called "Contango". http://www.bloombergview.com/articles/2015-03-31/how-oil-markets-came-to-embrace-contango http://www.bloombergview.com/articles/2015-03-31/how-oil-mar...
- kelvin0 11y agoMakes sense to me, why the downvotes? Maybe missing some references to back up his claim?
- jfno67 11y agoI wonder if all those tankers next to Fujairah are indicating the same thing. http://www.marinetraffic.com/en/ais/home/centerx:56/centery:25/zoom:10 http://www.marinetraffic.com/en/ais/home/centerx:56/centery:...
- tomohawk 11y agoDuring the oil 'crisis' in the 70's, when there were long lines of cars at the gas stations, my dad remembers seeing fully loaded tankers stacked up at Tampa for a long period of time. The speculation ranged from (a) the president wanted to use the crisis to drive a different energy policy, to (b) the oil companies were waiting to offload as the price kept climbing.
- hammock 11y agoZero Hedge had a good piece on this yesterday and goes a bit into contango, where future prices are higher than spot prices, essentially incentivizing these tankers to just sit in the water. http://www.zerohedge.com/news/2015-11-12/something-very-strange-taking-place-coast-galveston http://www.zerohedge.com/news/2015-11-12/something-very-stra...
- nraynaud 11y agowhat I don't get is that if there are future contracts, they have to be fulfilled when the time comes, wasn't all this oil bought in advance with future contracts? I guess actual users of the oil have actually ordered it before as opposed to speculators, they need it now don't they?
- pjh68 11y agoBuy spot price, sell a future immediately. Works if the storage cost (i.e. keeping the ship & crew out of port) is greater than the spread.
- smegel 11y agoWow. I'm talking about the webpage.
- friddz 11y agoHere is another port where oil tankers often wait when oil prices are low: http://www.marinetraffic.com/en/ais/home/centerx:57/centery:25/zoom:10 http://www.marinetraffic.com/en/ais/home/centerx:57/centery:... I had the opportunity to go on board one of these ships in 2012 and here is a picture I took during that visit: http://imgur.com/hmM60h4 http://imgur.com/hmM60h4
- intrasight 11y agoIt's also cool to see the clusters waiting each side of the Panama Canal
- HiLo 11y agoYeah, there's also 50% of the US' refining capacity along the Gulf Coast, as well as a massive new surge of crude and therefore products in the area. They simply can't get enough dockspace or pipeline takeaway capacity to make a meaningful dent.