Oil price drop has no impact at pumps

Fuel prices will not change immediately in Madeira

Graphic of oil prices droppingOil may have reached historic minimum prices, but fuel prices at the pumps in Madeira will not change immediately. This is according to the Regional Secretary for Economy, Rui Barreto, talking to JM, explaining that regional reserves are being consumed “slowly”, and only those with the capacity to store fuel will be able to take the opportunity to benefit from the current low prices.

Thanks again to Jaime for another link sent last week, when oil prices in the US dropped into minus numbers (-$37/barrel at one point) due to the slump in demand caused by C19 – traders were paying people to take it off their hands. Apparently there isn’t enough storage space in world refineries to deal with what has already been bought in the futures trading markets, so VLCC “supertankers” are now being used as storage tanks all over the world.

On March 11, the Straits Times at the reported that the cost of renting a VLCC, which can carry 2 million barrels of crude and can be used for floating storage, was thought to be around US$38,700 per day, compared with around US$30,700 per day on the previous Friday and US$14,800 a month ago, shipbroker sources said.

On April 21, the Telegraph reported that the cost of leasing ships used for storing crude had soared as the amount of storage space dwindles amid a global oil glut. By now, day’s rent of a very large crude carrier (VLCC), had soared sixfold to $150,000 as traders and producers scrambled to find new places to stash their oil compared with the cost a year ago.

More than 80 huge tankers, each holding up to 80m gallons, are floating off the coasts of Scotland, Texas and elsewhere. There are 141m barrels sitting out at sea, according to energy intelligence firm Kpler – a figure expected to continue growing.

2 thoughts on “Oil price drop has no impact at pumps”

  1. As usual, the price of crude drops the price of petrol & diesel don’t drop for ages and then only by a little. Price of crude rises and the price of petrol & diesel jumps up immediately.

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