Oil Tanker Traffic Jam Off of Galveston, TX Is Viewed as Sign of Oversupply

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A traffic jam of oil tankers, with more than 20 million barrels of crude, has emerged along the Texas coast this month, a snarl that some traders see as the latest sign of an unyielding global supply glut.

More than 50 commercial vessels were anchored outside ports in the Houston area at the end of last week, of which 41 were tankers, according to Houston Pilots, an organization that assists in navigation of larger vessels. Normally, there are 30 to 40 vessels, of which two-thirds are tankers, according to the group.

Although the channel has been shut intermittently in recent weeks because of fog or flooding, oil traders pointed to everything from capacity constraints to a lack of buyers.

“It appears that the glut of supply in the global market is only getting worse,” said Matt Smith, director of commodity research at ClipperData. Several traders said some ships might have arrived without a buyer, which can be hard to find as ample supply and end-of-year taxes push refiners to draw down inventories.

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