The oil recovery is under threat.
Oil tankers have become super-expensive — a sign that drillers are flooding the market once more, according to a report Wednesday by Bloomberg’s Naomi Christie and Bill Lehane.
The daily rates for oil supertankers is at the highest level for this time of year since 2008, Bloomberg reported.
Benchmark charter rates surged 57% in the two weeks leading up to the end of last week, because of a sudden rise in demand.
According to Bloomberg, the surge in the cost of oil supertankers is sending a bearish signal to the oil market.
The 12-member oil cartel OPEC is determined to maintain its share of the oil market and is flooding the market to keep up with the supply glut elsewhere.
Meanwhile, Goldman Sachs analysts said last Friday that West Texas Intermediate crude oil prices have recovered to a sweet spot — near $US60 per barrel — where US producers are comfortable with ramping up production again.
Earlier this year, we saw the oil market enter super contango as traders hoarded oil in storage because futures prices were higher than expected future spot prices.
Storage itself became a tradable commodity, with the CME group creating the Gulf-Coast crude-oil storage futures contract.
West Texas Intermediate crude oil prices were roughly unchanged near $US57.50 on Thursday morning.