Oil Tanker Rates Lowest Since 1997 as Demand in Europe Plunges

Townhall.com ^ | June 6, 2012 | Mike Shedlock

[Kaslin]

Bloomberg reports Oil Tankers Squeezed as Rates Drop to Lowest Since ’97.

[headstamp 2]

Oil is up now.

[George from New England]

Global shutdown. We are all boarding those intergalactic flights to Alpha Centauri. Earth is in evacuation mode.

Nevermind.

[Uncle Slayton]

The Obama mismanagement of the American economy has been so devastating that it has caused the European economies to crash and our oil industry to suffer through plunging prices.

[crosshairs]

We are all boarding those intergalactic flights to Alpha Centauri. Earth is in evacuation mode.

Send the liberals to Uranus.

[blam]

I’ve read from 2-3 sources that the cause of the depressed rates is due to over capacity, to many new ships, etc.

[Oatka]

We are all boarding those intergalactic flights to Alpha Centauri. Earth is in evacuation mode.
Send the liberals to Uranus.

Good suggestion, as that's where they stick their heads.

[Elsie]

Send the liberals to Uranus.

Barney has shown them the way...

[riri]

In many places in Europe —those with cars (and not everyone has a car like the United States) tend to have car that they use sporadically, for shopping, weekend trips, etc. they use the bus, train or bike as their main mode of transportation. So, it’s not inconceivable that those people are driving less and less during the turmoil.

[American in Israel]

Last month a couple of tankers returned to Alaska with oil in the holds as they could not find buyers for the crude on the West Coast. What was cited in the newspaper article was “refinery problems”.

I suspect the refinery problem is a surplus of product. People cannot afford gas without jobs.

[Attention Surplus Disorder]

There is another factor in this picture, which John Batchelor spoke about on tonight’s show: He (and a couple of interviewees) said it is happening with copper, and I would not be surprised to find it happening with oil. I believe it is true that JPM and the larger banks are using oil tankers as storage tanks for oil of which they take possession, as longs in the futures market. And I think this has been fairly well documented. Additionally, China is in effect speculating in some of these commodity markets as a means of translating Yuan into dollars. It is sort of convoluted how they are doing it, but by borrowing in dollars and using a commodity they buy and then own as collateral, they can both obtain dollars and speculate (as longs) on their own currencies. IOW, they are beter on the appreciation of their own currency against the dollar. I’m probably not explaining this phenom adequately, but I believe the current tanker capacity is overlarge, being inflated by the amount of tanker capacity being used as floating storage tanks.