Tank Storage Demand Surges Despite Oil Market Turbulence: A Look at Industry Trends and Consolidation
Despite the phony propped up backwardation that we’re seeing in the oil markets, The Tank Tiger has been fielding inquiries for tank storage. Last week we published requests for Ethanol, Gasoline, Diesel, Base Oil, Lube Oil, Renewable Diesel, and crude oil covering the US Gulf Coast, US East Coast and the Pacific Northwest. If you’d like to see all of our storage requests, just jump over to our website or sign up for our free peer to peer online platform. If you have a commercial need or just a prevailing curiosity to find out what’s going on in the world of storage, and what peeps might be looking for, you’ll soon find out that The Tank Tiger is the hub of the storage universe.
The pretzel logic associated with the juggling of near term oil supply continues. Simply put, Washington and its Western allies have the wherewithal to throttle Russia and Tehran in order to penalize them for their bad behavior. But, in an election year, it turns out that not many have the stomach for higher oil prices and the disruption of foreign policy goals that would inevitably result from sharpened sanctions. Stranger things have happened. Wawa has pizza! Both the Baylor Bears and the oil bears came out ahead last week. Despite what we’re hearing on the campaign trail, the US continues to drill baby drill as US oil production hit another all time high at 13.5 million barrels per day. Oil futures plummeted more than 7% on the week as traders processed reports that Chinese demand is cooling while also considering reports of plentiful oil in 2025. Brent crude futures settled Friday at $73.06 a barrel while WTI crude toasted Friday happy hour at $69.22 a barrel.
Congrats to ONEOK, Inc. as they announced the successful completion of its acquisition of Global Infrastructure Partners’ (GIP) entire interest in EnLink Midstream, LLC , for a total cash consideration of approximately US$3.3 billion. Truth be told, consolidation has been a multiyear trend over the last decade in energy infrastructure. That has continued in 2024 with the Sunoco acquisition of NuStar Energy in May. Last summer we saw EQT Corporation acquire midstream C-Corp Equitrans. There were also familial mergers with parent companies buying up their midstream spawn. It’s not just George Costanza with shrinkage in the pool. The number of North American midstream companies has been whittled down by these mergers in the last 10 years from 83 companies to 35 in 2023. Oh my…it’s PacMan fever! Bucking this trend are the asset-naked private equity backed companies that are seeking to aggregate pots and pans and form new midstream organizations. Many of these companies are stocked with experienced industry veterans, and their investors are sometimes frustrated for their bridesmaid forays whenever assets are out for bid and they come back empty handed. Wish in one hand.
