When the world economy slammed on the brakes last year, there was a rush to store a wave of unwanted crude and products, but rising prices and optimism about demand is spurring a swift unwinding of storage contracts.
At the end of February, the volume of refined products held on stationary tankers for over 10 days stood at 19.2 million barrels, down 77 from a peak of 84 million last May, IHS Markit estimates show.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC, closely monitors global inventories, and the rate of drawdowns will be a major factor discussed when it meets on output policy on Thursday.
A year ago, traders were struggling to find storage capacity, and prices for it surged as fuel consumption plummeted. Earnings for product tankers surged to record highs above 100,000 a day last May versus less than 10,000 currently.
Remote salt caverns in Scandinavia and unused U.S. pipelines and railcars were pressed into service.
But now, capacity is again becoming available, in Northwestern Europe, the Mediterranean, Middle East and North America, brokers said.
Parties are giving notice to terminate contracts by AprilMay, said Krien van Beek, a broker at ODINRVB Tank Storage Solutions in Rotterdam.
Brokers in the United States are also seeing lower prices offered for storage of crude and products.
In January the unrelenting price runup in oil futures commenced, and that scared people away who had been considering taking…