28 Saudi oil tankers destined for America could lead to a collapse in oil prices in May

The American website "Oil Price" quoted the Energy Research Institute Ristad Energy, that with the Covid-19 epidemic dramatically reducing global oil demand, oil tanks are quickly filling in the United States, which forced producers to start shutting production In the country, creating great traffic in the tanker movement on the coasts.

And the analysis of the Energy Research Institute, Ristad Energy, reveals that 28 Saudi oil tankers, including 14 huge tankers loaded with 43 million barrels of oil, will arrive in the Gulf and western American coasts between April 24 and May 24.

The site reported that the Saudi fleet, which carries oil in Ras Tanura, will join the 76 tankers that are currently competing to unload their cargo in American ports. Most of these tankers docked off the West Coast, where 34 tankers are waiting to unload about 25 million barrels of crude oil, in addition to 31 tankers of similar load waiting to unload their cargo on the US Gulf Coast.

The site stated that the "congestion" of tankers has increased in recent days due to the refining companies canceling or delaying their purchases, while working to adjust usage rates in proportion to the sharp decline in the demand for fuel for cars and aircraft.

Store
According to Paula Rodriguez Maceo analyst oil markets , "Ristad Energy", the "total volume of oil reserved newcomer from the top of the top of the skirt four times the average imports of the past four weeks , coming from Saudi Arabia. Given the state of storage and the current level of congestion on the US coast, it is "It is unlikely that all tankers will be able to offload their cargo upon arrival. The congestion in American ports has reached new highs."

And if all Saudi tankers are offloaded, the crude oil they carry during May will compensate for the decrease in production levels recorded in March, which will actually keep the packing rates in storage units high at the present time.

The site pointed out that limited storage is a growing concern in the oil market, and is among the main reasons behind the price drop sharply in recent weeks, with WTI declining a few days ago.

Prior to the creation of official inventory data for the seventeenth week (ending April 24), commercial crude oil stockpiles stood at 518.6 million barrels, 9% more than the average recorded during the five years at this time of the year, a difference of 9.16 million barrels from The record set in the spring of 2017 is equivalent to 535.5 million barrels.

Decline in demand
According to Rodriguez Maceo, with the decline in demand for oil by US refineries to more than three million barrels per day during the past four weeks, oil production has decreased by about 800 thousand barrels per day, according to the US Energy Information Administration. And it expected to decrease by 800 thousand barrels per day also in the coming weeks.

However, crude oil imports are expected to remain at around 5.8 million barrels per day during the next four weeks, due to Saudi oil tankers that are rapidly approaching US shores, according to Maceo.

The site warned that US oil production tends to decline sharply in May and June, as companies stopped production in some wells due to restrictions on storage and setting oil prices.

Restad Energy estimated that one-company closings (out of six) could result in losses of at least 300,000 b / d, in April and May.

It should be noted that the total closings represent only a portion of the total decline in US production since March 2020, as these figures include only production losses from productive wells that cease to be exploited, and that does not include production that is likely to be lost as a result of canceling drilling plans And exploitation.