Ample storage space for oil may limit price moves

REUTERS – There is more storage space for crude around the world than anticipated, which will help prevent further sharp falls in the price but also weigh against significant price rises, analysts and industry watchers say. New storage tanks built in recent years, mostly in the United States and Asia, leave hundreds of millions of barrels of space to fill, confounding expectations that excess production could overflow tanks and drive prices further down. The space also acts as a disincentive for countries to limit production, despite a record 3 billion barrels of oil and products already in storage in the developed world and Iran‘s plans to boost exports after sanctions were lifted on Saturday. But as the space is concentrated in national strategic storage and tanks that are further from trading hubs, it will become increasingly difficult for traders to make money by buying oil and placing it in storage. Oil prices have lost nearly 75 percent of their value in the past 18 months due to increased U.S. shale oil output and OPEC’s refusal to cede market share. Benchmark Brent crude dipped below $28 a barrel on Monday, its lowest level since 2003, but recovered above $29 on Tuesday

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