Following a dip in levels, the storage of crude oil offshore looks to grow in the US Gulf.
US oil futures are trading at a big discount to barrels for later delivery. Shipbrokers estimate floating crude storage fell roughly more than 60% from peaks above 100 million barrels in April.
NYMEX light, sweet crude for January delivery in mid-November traded at a $1.30 (0.86) a barrel discount to crude for delivery a month later, more than double last week's discount. January barrels traded for $77.85, a $3.70 a barrel discount to May barrels.
Millions of barrels were drawn ashore into U.S. physical crude markets over September and October, when contango discounts averaged between $0.30 and $0.40 a barrel, or less than the cost of tanker storage.
To lease 2 million barrel-capacity very large crude carriers (VLCCs) costs around $0.50 cents a barrel per month to store crude offshore.