The number of ships acting as floating storage vats for oil and liquefied natural gas is increasing as the coronavirus has reduced global appetite for energy.
Some 79 vessels were storing crude and condensates at sea on Tuesday, according to ship-tracking firm Kpler, up from 64 a year ago.
Traders often load up ships with crude at lower prices and lock in a higher price in the future.
The latest glut on the sea, however, is due to faltering demand. “Right now, the economics don’t call for an increase in storage,” said Giovanni Serio, head of research at oil-trading giant Vitol Group.
Rising volumes of oil at sea are likely to increase the downward pressure on prices. Brent is currently trading at $51.50, representing a 27.7% loss from the high of $71.28 registered on Jan. 8. WTI oil has also suffered a similar drop in the last two months and is currently trading at $47.30.
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