Business

Oil glut set to halve in May and shrink to 6 million bpd in June, but storage can’t breathe

‘We still believe in an oil price recovery, possibly as early as June, and see a risk for a tight market in 2022 with prices much higher than pre-crisis levels,’ says Rystad Energy.

Published

6 years ago

May 4, 2020

Admin

Independent energy research and business intelligence company Rystad Energy on Thursday (30 April) published its forecast for the aftermath and recovery of the global oil market post Covid-19 pandemic for the short term and long term:

Some good news: The global imbalance between oil supply and demand, which has built to 26.4 million barrels per day (bpd) in April due to the Covid-19 pandemic, is set to halve to 13.6 million bpd in May and fall further to just 6.1 million bpd, according to a Rystad Energy analysis. However, despite the improvement, the stock build will still overwhelm remaining global storage, which will fill in weeks.

Global supply is expected to fall in May to 92.8 million bpd, from 98.3 million bpd in April, and further decline to 91.1 million bpd in June. We expect June to see the lowest supply level this year unless further production cuts are announced, with output rebounding from July.

Demand on the other hand, which Rystad Energy estimates will reach its lowest point at 71.8 million bpd in April, will rise to 79.2 million bpd in May and to 85.1 million bpd in June, as governments ease Covid-19-related restrictions and some industrial activity resumes.

This supply figure already includes the cumulative 6.5 million bpd cuts we expect from OPEC+ countries, as well as more than 2 million bpd of production shut-ins from non-OPEC countries (such as Norway) suffering under the unprecedented market squeeze.

“While this may seem like a drastic improvement from April, the oil market is not magically fixed. The storage issue still looms large and will spill over onto trading floors, as buyers are left with crude they cannot physically cannot place, and into the boardrooms of oil companies which must make very costly but necessary decisions to scale back production and give the market some breathing space,“ says Rystad Energy oil market analyst Louise Dickson.

The demand-supply gap will become narrower in practice as we believe the market will be forced to tighten the stock build gap during May when countries run out of local storage. After local storage is exhausted, tankers will be packed with oil barrels seeking refuge in the country with the most remaining storage capacity – the US.

Until this gap is filled by additional shut-ins (possibly even within OPEC+ countries themselves), we can expect further downward pressure on oil prices, especially those that lack a clear conduit to the export market.

If sufficient production isn’t shuttered by 19 May 2020 (the expiration of the WTI June 2020 contract), then the potential remains for another nightmare WTI price collapse, which we do not rule out spreading to other crude blends. However, given that most oil futures outside of WTI do not require the buyer to physically take oil delivery, and instead have cash settlement options, the destruction to other benchmarks should be tamer.

The negative price crash is most clearly linked to the shortage in global storage. Currently, global storage for crude is about 90% full and for crude oil products, that figure is closer to 80%. Rystad Energy currently estimates that there is 400 million barrels of available global crude storage left, and that crude stocks will build by 13.6 million bpd on average in the month of May.

The math isn’t overly complicated, and at this rate, assuming storage tanks can only be filled to about 95% capacity due to technical reasons, Rystad Energy forecasts storage is already hitting the wall in the markets. And, it could reach capacity at the last storage facility standing, the US, towards the end of May. Cushing, Oklahoma could top up even sooner.

“No matter how this physical rebalancing occurs during May, we still expect that the oil price bottom is right in front of us rather than behind us. The next question for markets now is what the recovery will look like and how many oil companies are able to weather the storm and bring inevitable field shut-ins back onstream,” adds Dickson.

We still believe in an oil price recovery, possibly starting as early as June, and see a risk for a tight market in 2022 with prices much higher than pre-crisis levels. This will be facilitated by a recovery in demand to above pre-Covid-19 levels in 2022, ongoing OPEC+ cuts, and a loss of supply capacity in both US shale and long-cycled global production. Not all production that is currently being shut-in will be able to swiftly return.

Photo credit and source: Rystad Energy
Published: 4 May, 2020

Biofuel

Petrochina International blends over 30,000 mt of marine biofuel since March

Company has been developing marine biofuel blending operations at China (Zhejiang) Pilot Free Trade Zone, leveraging storage and logistics facilities at its Aoshan base.

Published

14 hours ago

September 21, 2026

Admin

Zhoushan completes China’s first batch of marine biofuel blending under pilot programme

Petrochina International Co Ltd recently said it has blended more than 30,000 metric tonnes (mt) mt of biofuel since completing the country’s first biofuel marine fuel blending operation on 13 March.

The company said the milestone demonstrates its ability to conduct continuous and large-scale biofuel marine fuel blending operations.

The company has been developing marine biofuel blending operations at China (Zhejiang) Pilot Free Trade Zone, leveraging storage and logistics facilities at its Aoshan base.

Its latest product, B24 marine fuel containing 24% biofuel component, meets relevant International Maritime Organization (IMO) requirements and marine fuel standards, according to the company. It said the product can be supplied for bunkering vessels operating on international routes.

It has used its global trading network to secure feedstock supplies and support cost control and supply security for the blending operations, it added.

The company said the large-scale blending of its marine biofuel products marks a development in China’s marine biofuel blending market.

It plans to work with upstream and downstream businesses within its group to support the development of Zhoushan Port as a major bonded marine fuel bunkering hub and contribute to its parent group’s transition towards lower-carbon energy.

Manifold Times previously reported China (Zhejiang) Pilot Free Trade Zone launching the first pilot programme for marine biofuel blending in China with the completion of the first batch of B24-HSFO.

The launch was marked with the blending of 2,000 mt of biodiesel and 6,300 mt of high sulphur fuel oil (HSFO) in storage tank F-02 of Sinochem-Xingzhong Oil Staging (Zhoushan), producing 8,300 mt of B24-HSFO.

Manifold Times also reported the first cross-regional bonded bunkering operation of blended biofuel in East China was successfully completed at the Meishan Port Area of Ningbo-Zhoushan Port.

The B24-HSFO used in the bunkering operation was supplied by the Aoshan Petroleum Base in Zhoushan from the first pilot programme for marine biofuel blending in China.

Photo credit: Sinochem-Xingzhong Oil Staging (Zhoushan)
Published: 21 September, 2026

Winding up

Singapore: Final general meetings scheduled for Dromond Shipping, related firms

A member is entitled to attend the meetings and should notify the liquidators’ team office via email no later than 48 hours prior to the meeting.

Published

14 hours ago

September 21, 2026

Admin

The final general meetings of Dromond Shipping Pte Ltd and related companies have been scheduled to take place on 19 October, according to the company’s liquidator on a notice posted on Friday (18 September) on the Government Gazette.

The other companies are Tidewater Emergency Response Services Pte Ltd, Tidewater Production Solutions Pte Ltd and Tidewater Salvage Pte Ltd.

The final general meetings of the members of the companies will be held via electronic means on 19 October 2026 at 2.00 pm, 2.30 pm, 3.00 pm and 3.30 pm (Singapore time), respectively.

The meetings are being held for the purpose of having accounts laid before the members showing the manner in which the winding up of the respective companies has been conducted and how the property of the respective companies has been disposed of and to hear any explanation that may be given by the liquidators.

The details of the liquidator is as follows:

Tan Kim Han
Joint and Several Liquidators
137 Amoy Street, #02-03, Far East Square
Singapore 049965

Note: A member is entitled to attend the above meeting and should notify the Liquidators’ team office via email to [email protected] or [email protected] no later than 48 hours prior to the meeting.

Photo credit: steve pb from Pixabay
Published: 21 September, 2026

Ammonia

NYK wraps up first STS ammonia bunkering operation in Japan

Ammonia fuel was transferred from the ammonia carrier “Shoei Maru” via the STS method to an ammonia-fuelled medium gas carrier, scheduled for delivery in November 2026.

Published

14 hours ago

September 21, 2026

Admin

NYK wraps up first STS ammonia bunkering operation in Japan

NYK Line, on Thursday (17 September) with Japan Marine United Corporation, Nihon Shipyard Co Ltd, Mitsubishi Gas Chemical Company, and Kokuka Sangyo Co Ltd, has completed the world’s first ship-to-ship (STS) ammonia bunkering operation to an ammonia-fuelled vessel.

At a quay within Japan Marine United Corporation’s Ariake Shipyard, ammonia fuel was transferred from the ammonia carrier Shoei Maru via the STS method to an ammonia-fuelled medium gas carrier (AFMGC) scheduled for delivery in November 2026.

The operation was conducted in preparation for sea trials of the AFMGC using fuel ammonia.

“This achievement represents an important initiative that has put into practice an operation essential for the future practical deployment of ammonia-fuelled vessels,” the company said.

The bunkering operation was conducted following extensive discussions among the companies involved. Safe operating procedures and work processes were established prior to the operation, enabling the transfer to be completed safely. Through this initiative, we have accumulated practical insights regarding safe fuel supply operations.

This operation serves as a pioneering example of the fuel-supply framework that will be required for the widespread adoption of ammonia-fuelled vessels.

The AFMGC is currently in the final stage of construction and is scheduled for delivery in November 2026.

“The successful completion of this operation marks a significant milestone toward the broader commercial use of fuel ammonia and the practical deployment of ammonia-fuelled vessels. It also represents an important step forward in establishing an ammonia supply chain,” the company added.

Photo credit: NYK
Published: 21 September, 2026