Sign in
Why are you using WhatsApp?
We have the only messenger dedicated to the industry right here!
Newsfeed, Jobs, Chat, Vendor Network, Crew Creator and Location Services
Subscribe to our mailing list to receive trending oil and gas news!
Rates to store oil at one of the world’s biggest trading hubs are surging, as traders globally scramble to secure space in tanks to cope with slumping demand from the coronavirus outbreak and a flood of supply from the Saudi-Russia price war.
The need for a place to park all that surplus crude is breathing new life into the market at Cushing, Oklahoma, the nation’s hub for trading of billions of dollars of crude a day and the town that bills itself “the pipeline crossroads of the world.â€
Analysts estimate the glut could reach more than 1 billion barrels. Some of the excess crude will be absorbed by nations snapping up cheap oil for their strategic reserves, including India and the United States, but that will only mop up some of the supply.
Storage rates in the Caribbean, which have been weak over the past couple of years, have also strengthened over the past week, market sources said.
And oil majors have shown interest in storing oil offshore in tankers, shipping sources said, although most vessels have already been chartered for transporting crude instead as freight rates surge. “They can ask, but ship owners don’t want it,†one shipping source said.
Storage rates at Cushing, doubled over the past month, and were seen as high as about 50 cents per barrel per month by Friday, two traders familiar with the matter said. Storage for about 540,000 barrels at Plains All American’s Cushing tanks for sublease was offered at 50 cents per barrel (cpb) for a term of one year, one source said.
“We average about 2 deals per day. Last week we booked 60 deals,†said Ernie Barsamian, founder and CEO of The Tank Tiger, a terminal storage clearinghouse based in Princeton, New Jersey.
The United States currently has more than 450 million barrels in crude storage, not including strategic reserves. The drop in prices has sparked numerous storage inquiries, particularly at Cushing, the delivery point for benchmark U.S. crude futures.
Nearly 38 million barrels are currently parked there, half the about 76 million barrels in capacity. The rest of U.S. storage is at smaller tank farms or refining facilities. Inventories at Cushing rose more than 640,000 barrels in the week through Friday, traders said, citing data from market intelligence firm Genscape.
“Everyone and their mother is scrambling to fill up tankage,†one trader said.
Check out our other current stories!
Join the largest oil and gas community on iOS and Android!
Download the app here!
Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Why are you using WhatsApp?
We have the only messenger dedicated to the industry right here!
Newsfeed, Jobs, Chat, Vendor Network, Crew Creator and Location Services
Subscribe to our mailing list to receive trending oil and gas news!
Comments (0)