The Tanker Market Is Sending a Big Warning to Oil Bulls - Bloomberg Business

The Tanker Market Is Sending a Big Warning to Oil Bulls - Bloomberg Business:



"Four months into oil’s rebound from a six-year low, the tanker market is sending a clear signal that the rally is under threat.



A sudden surge in demand for supertankers drove benchmark charter rates 57 percent higher in the two weeks through May 20. OPEC will have almost half a billion barrels of oil in transit to buyers at the start of June, the most this year, while analysts say about 20 million barrels is being stored on ships in another indication the glut has yet to dissipate.



The Organization of Petroleum Exporting Countries is pumping the most oil in more than two years, determined to defend market share rather than prices. A record cut to the number of active U.S. drilling rigs and billions of dollars of spending reductions by companies since last year’s price plunge has yet to translate into a slump in barrels produced. The world is producing about 1.9 million barrels a day more crude than it needs, according to Goldman Sachs Group Inc."



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