A traffic jam of oil tankers has emerged along the Texas coast this month, a snarl that some traders see as the latest sign of an unyielding global supply glut.
Reuters reports more than 50 commercial vessels were anchored outside ports in the Houston area at the end of last week, of which 41 were tankers, according to the Houston Pilots, an organization that helps larger vessels navigate in and around port areas. Normally, between 30 to 40 vessels are anchored offshore, of which two-thirds are tankers, according to the pilots.
Although the channel has been shut intermittently due to fog or flooding in recent weeks, pilots say those issues were not significant enough to create the backlog.
“It’s not because of a lack of pilots or tug boats,” according to JJ Plunkett, a Port Agent with the Houston Pilots.
As of Friday, more than 20 million barrels of crude were sitting in vessels anchored outside the U.S. Gulf Coast waiting to discharge, double the volume that typically waits to discharge each week, according to Matt Smith, director of commodity research at ClipperData.
“We’re seeing ships idling off the coast of China, Singapore, (the) Arab Gulf, and now the U.S. Gulf. It appears that the glut of supply in the global market is only getting worse,” Smith says.
Oil traders in the U.S. cash market pointed to everything from capacity constraints at Gulf Coast storage tanks to a lack of buyers for the imported barrels.
While U.S. data show Gulf Coast inventories hit a record 251.7 million barrels just over a week ago, major facilities at Corpus Christi, Houston, the Beaumont-Nederland area, and St. James Parish were still barely two-thirds full at the end of October, according Genscape data.
