Cheap oil is taking shipping back to the 1800s

The plummeting price of oil on international markets has had many effects – one of which is that it may be cheaper for ships to travel right around Africa than go through the Suez Canal.

By Chris Baraniuk

4 March 2016

The Suez Canal was one of the most significant engineering projects of the 19th Century. It was a gargantuan task that took nearly 20 years to build and an estimated 1.5 million workers took part – with many thousands dying in the process. But when it finally opened in 1869, ships could travel from the Red Sea – between Africa and Asia – to the Mediterranean, cutting weeks off a journey. It was a revolution for trade.

Ever since, passage through the canal has been considered more or less vital to global business. Shipping firms pay what amounts to several billion dollars every year to the Suez Canal Authority, an Egyptian state-owned entity, for the privilege of travelling via the canal.

To take an example, it cuts a modern journey from Singapore to Rotterdam in the Netherlands by nearly 3,500 nautical miles (6,480km) – saving vessel owners lots of time and lots of money.

Travelling through the canal can cost shipowners nearly £250,000 ($350,000) (Credit: Getty Images)

However, more and more some ships are deciding not to take the Suez route. Instead, they are travelling around the Cape of Good Hope, right at the southern tip of Africa. Over 100 ships did this between late October 2015 and the end of the year.

“I’ve been covering shipping for the last eight years,” says Michelle Wiese Bockmann, from oil industry analysis firm OPIS Tanker Tracker. “It is very rare to see this volume going round the Cape.” Right now, she’s keeping tabs on half a dozen diesel and jet fuel-carrying ships on this very route.

One of the big factors here, explains Bockmann, is the low price of oil. This means that “bunker fuel” – the thick, heavy fuel the ships themselves run on – is currently very cheap. Indeed, Singapore prices for such fuel have fallen from around $400 (£286) per metric ton in May 2015 to around $150 (£107) today.

As a result, sea journeys aren’t as costly as they have been in recent years. But is there any sense in taking longer than you need to? Ship manufacturer Maersk estimates that a vessel travelling at 13.5 knots will take an extra 11 days to go via the Cape. Why bother?

For one thing, there are steep fees for using the Suez Canal – Maersk says these can be approximately $350,000 (£249,000) per ship. There are other costs, too. Rose George, author of Deep Sea and Foreign Going, was on board a ship using the Canal a few years ago. She notes that vessels must agree to taking on a Suez crew for the transit.

“[The Suez crew] seem to do nothing but listen to tinny radio and try to sell souvenirs,” says George, adding the ships often have to pay a cigarette ‘tax’.

“On each voyage, Suez costs a ship about £400 ($560) of cigarettes, as well as dozens of chocolate bars from the bond locker.”

These irritations aside, there is also the tricky economics of oil and shipping markets.

More and more oil and refined oil products are being kept at sea or in storage as traders wait for prices to rise again

For one thing, at the moment traders are playing with what’s called a “contango” – more and more oil and refined oil products are being kept at sea or in storage as traders wait for prices to rise again. Currently there is an oversupply of crude oil around the world, and while we have more crude than we need, the demand for gasoline – a refined oil product – is quite high. This situation has led to volatility in the market and that’s where traders are making their money, says Bockmann.

“One of the trading strategies would be that they haven’t sold the cargo and they need additional time,” she points out. She also adds that ships can sometimes be anchored offshore – a situation known as “floating storage” where they simply wait for the market to favour what they have on board. “Floating storage hit a five-year record in December and it hasn’t really dropped that much since then,” Bockmann says.

The Suez Canal was built so that ships did not have to negotiate the challenges of the Cape of Good Hope (Credit: Getty Images)

For ship owners, then, the ball seems to be mostly in their court. They can choose to be at sea longer in certain cases and they can take longer routes, even shopping unsold cargo round various ports in Asia, Africa and Europe, in an attempt to find the right buyer at the right time. The ships must be the right size for a given port, and the products on board need to meet required standards in the local market – but as long as someone suitable does, eventually, buy that cargo at a favourable price, then the traders will do well. If not, they could lose money.

For now some ships have decided to take those additional thousands of miles round the Cape, hoping that at the end of the voyage they’ll come out in profit. It may seem strange – but in the world of oil, sometimes you’re better off taking the long way round.

December 18, 2015

Something Very Strange In The Middle Of The Atlantic Ocean Another Sign It's Almost Time For Everything To Fall To Pieces

By Stefan Stanford - All News Pipeline - Live Free Or Die

Back on November 12th, Zero Hedge told us about something very strange that was taking place off of the coast of Galveston, Texas with a 2-mile long line of tankers full of crude oil heading from Iraq to the US and what was being called 'a gargantuan glut' as stockpiles keep rising around the world.

We've since learned from Reuters that 3 diesel tankers on their way from the US to Europe have been required to turn around, one only 800 miles off of the coast of Portugal, and return to the US as Europe's storage was nearly filled to the brim as the oil sector is looking at massive downsizing and 'acute pain for the holidays'. From Zero Hedge.:

In the latest sign that the world is simply running out of capacity when it comes to coping with an inexorable supply of commodities, three diesel tankers en route from the Gulf to Europe did something rather odd on Wednesday: they stopped, turned around in the middle of the ocean, and headed back the way they came! 

"At least three 37,000 tonne tankers - Vendome Street, Atlantic Star and Atlantic Titan - have made U-turns in the Atlantic ocean in recent days and are now heading back west," Reuters reported, citing its own tracking data.

The problem: low prices, no storage capacity, and soft demand.

With more than a full days worth of global oil supply now stuck in limbo and the price of oil continuing to plummet, we need to look back at previous warnings that have been given by experts, including Russian President Vladimir Putin, of what signs we need to watch out for of impending doom in the financial markets and in this week alone, we've seen two of them come to fruition before our very eyes.

In a speech in 2014, Putin warned the world of 'terrifying consequences' if oil fell below $40 a barrel, a sentiment echoed by investor Jeffrey Gundlach a short time later, who stated: "I hope it does not go to $40 because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be – to put it bluntly – terrifying.”

With the price of crude currently sitting at $34.97 a barrel, we saw another sign of imminent financial doom this week in Janet Yellin's raising of the interest rate at the FED. We've also reported several times that a rise in the interest rates would likely be a signal to the rest of the nwo scum that all hell is preparing to break loose with a series of devastating events leading to the collapse of the big banks and the coming death of money. 

Susan Duclos told us on December 8th about a warning given by Peter Schiff that the FED could soon trigger a $9 trillion dollar debt implosion by raising interest rates by even as much as .3 to .5%. On Wednesday, Janet Yellin raised interest rates from .25 to .50%. Susan Duclos reminded us back on the 8th what this all means.:

If you think this is just fear mongering, you’re mistaken. The Treasury Dept. issued emergency kits to employees a few months ago in anticipation of systemic volatility during the rate hike. Similarly, the Fed boosted the size of its market operations department in Chicago case the NY Fed loses control of the system when rates increase.

In short, we could very well be on the eve of another systemic crisis. The financial elites have been preparing for this for months.This is what the elites have been preparing for, all those indicators of buying up "remote hideouts, and the "panicked super-rich arranging bolt holes with private airstrips" to escape social unrest that will follow a complete crash.

Back in November, the logjam off of the coast of Texas left 40 tankers with a combined capacity of 28.4 million barrels of oil just waiting to anchor as seen in the photograph below showing off of the coast of Texas. As we were told by back in late 2014 by Putin, the price of oil falling below $40 a gallon was a sign that the bottom was getting ready to drop out.

In the 1st video below, Dave with the X22Report tells us why the FED rate hike will likely lead to the next phase of the economic collapse while in the 2nd video, Peter Schiff tells us Janet Yellin gets nuts.

The 3rd video is the previous warning from back in January 2015 that if oil fell to below $40 a barrel, there would be terrifying consequences for the world. With oil now more than $5 a barrel below $40, we have to ask, have we now reached that point in time previously warned of by Putin and others? Is $20 oil coming as suggested in the final video from Crush The Street and would that lead to the break in gold and silver as they suggest here?

With the plunge protection team in continuous use in America attempting to magically prop up our economy and stock markets, we realize they could drag this on for a long time - however, doing so would not allow them to stick their 'new world order' beast system into place. We fully expect this broken system is running out of time.











The charts above videos, at the top of the story and below are courtesy of Marine Traffic. Below is the path of Atlantic Titan.

The Terrifying Dark Years Are About To Begin As The World Now Faces Greatest Downside Risks In History 08/08/15

(http://kingworldnews.com/the-terrifying-dark-years-are-about-to-begin-as-the-world-now-faces-greatest-downside-risks-in-history/)

Comments by Steve,author of this website: Are the 4 horsemen of the Apocalypse about to ride forth? See the Book of Revelations in the Bible Chapter 6. The above picture is obviously intended to be the infamous GRIM REAPER or the 4th and 5th HORSEMEN also know and personified as "DEATH" & "HELL"

REV.6:8 So I looked, and behold, a pale horse. And the name of him who sat on it was Death, and Hades followed with him. And power was given to them over a fourth of the earth, to kill with sword, with hunger, with death, and by the beasts of the earth.

 According to the excellent article above, on the KINGWORLDNEWS.COM, allegedly there will most definitely be the world's worst financial CRASH IN HISTORY coming this AUTUMN! All financial signs point to it! God help us all, if this turns out to be true!

By Susan Duclos - All News PipeLine

In the latest release from trader and stock expert Gregory Mannarino, we are told by both his video from July 27, 2015 and with charts and a detailed explanation on his Seeking Alpha blog that 'something horrible is coming.'

Mannarino asserts that it is a mathematical certainty, using China's latest actions as an example, that when a government or central bank attempt to "prop up" or "fix" a market using artificial means, it is doomed to fail.

Offering what he calls "absolute proof that governments do not fix problems, they only make them worse by intervening," Mannarino connects what we have been watching happen to China's stock market to the rigging and manipulation the Federal Reserve has been practicing, to offer the following conclusion:

The worst part of all this is the global debt crisis, of which we are in right now, also cannot be fixed by any intervention of central banks colluding with their governments. Further, a terrible price is going to be forced upon the citizenry of the world because of this action. The only job of the markets is to determine fair market value, and when governing bodies of any kind attempt to interfere with that mechanism only disaster will come from it.

In March 2015 John Crudele of NY Post reported "Stock market rigging is no longer a ‘conspiracy theory’," as he quoted Ed Yardeni, a longtime Wall Street guru "who isn’t one of the clowns of the bunch," as stating "“These markets are all rigged, and I don’t say that critically. I just say that factually,” he asserted on CNBC.

The "horrible" thing that is coming according to Mannarino is a "global financial meltdown."

Three more articles should be read to understand it is not just Mannarino, but others are seeing the same train bearing down on the global markets.

First,  American economist, Paul Craig Roberts, who served as an Assistant Secretary of the Treasury for Economic Policy in the Reagan administration, explained back in December 2014 that "Financial Market Manipulation Is The New Trend," asking if it can continue.

Then we move to The Economic Collapse website on which points to the DOW's 500 point plunge last week and stating "It was the biggest one week decline that we have seen so far in 2015, and some are suggesting that this could only be just the beginning."

Last but not least on July 27, 2015, Zero Hedge discusses the "Irony of Market Manipulation."

The bottom line  is the Federal Reserve and governments globally are running of ways to rig and manipulate the market, they are approaching a brick wall and when they hit it everything is going to come crashing down on our heads.

DANGER: Twin Crack-Ups Set To

Implode The World Economy And

Financial System

Paul Craig Roberts – The Fate Of

The Entire World Is About To Be

Decided

In order to understand what is really going on around the globe in terms of the collapsing economy, we must set aside false mainstream versions of reality

01/07/15 SOURCE:-(alt-market.com)

When it comes to the EU and its current fiscal turmoil, it is very important to, in some respects, ignore Greece entirely. That’s right; forget about all the supposed drama surrounding Greek debt obligations. Will they find a way to pay creditors? Will they default? Will they make a deal with Russia and the BRICS? Will there be last-minute concessions to save the system? It doesn’t matter. It’s all a soap opera, an elaborate Kabuki theater run by international financiers and globalists.

It is most important to remember the fundamentals. Greece will default on its debts. Period. There is no way around it. Maybe Greece makes a deal today, maybe it makes a deal tomorrow; but eventually, the country’s ability to stretch out its resources in order to meet its exponential liabilities will end. It is inevitable, and no last-minute “deal” is going to change the math at the core of it all.

Why are so many economists so worried about a little country like Greece? It’s all due to a great lie: a dishonest narrative being perpetuated by the establishment that if Greece falls, defaults or leaves the EU, this could trigger a domino effect of other nations hitting a debt wall and following suit. The lie embedded in this narrative is the claim that Greece will cause a “contagion” through the act of default.  Let’s be clear – there is no contagion. Multiple countries within the EU have developed their own debt problems in spite of Greece over the past couple of decades, not because of Greece. Each of these countries, from Italy, to Spain, to Portugal, etc. has its OWN sovereign debt disasters to deal with caused by its own fiscal irresponsibility. The only legitimate reason for a so-called contagion is the fact that these countries have been forced into socialist interdependency through the EU structure.

Never forget this: The EU is in trouble not because of Greece, but because of forced supranational interdependency. The EU by all rights should not exist, nor should any centralized supranational single currency system.

I would also point out that globalist institutions like the International Monetary Fund are highly motivated to initiate disaster in the EU, despite some people’s assumptions that the EU is some kind of representative model of globalization. It’s not. If this were the case, then the IMF would not be stiffing Greece on debt aid while continuing to help Ukraine despite Ukraine’s similar inability to pay.

Why would the globalists want a partial breakup of the EU? What would they gain from such an event? That’s easy; they gain crisis, chaos and an opportunity to present a false dialectic.

Europe is not at all representative of what globalists really want in terms of economic and political structure, no matter what many people assume. It is a, rather, a kind of facsimile; a half measure. When Europe hits the bottom of the financial abyss and the bewildered public begins asking what the hell happened, the elites will be there with an immediate explanation. They will claim that it was not the EU’s interdependency that was the problem. Instead, they will assert that the EU was actually not centralized ENOUGH. They will claim that in order for a supranational economy and currency to work, we must also have supranational governance. In other words, the system failed because it needs to be stabilized by global government.

The Fabian socialists will argue that it was the barbaric and outdated institution of national sovereignty that caused the full-spectrum crisis. They will completely gloss over the negative effects of an interdependent economic system and the fact that a lack of redundancy leaves cultures simpering and impotent. We’re all one big human village after all, so we should accept the idea that we all succeed or fail together. Free markets and individual innovation apparently have nothing to do with a thriving economic structure. What we really need is a hive mind amalgamation that turns us all into easily replaceable parts in a massive rumbling lawnmower that chews up our heritage, history and principles for the sake of some arbitrary greater good and the promise of alchemical floating cities in the sky where no one has to work anymore.

The fall of the EU is a means to an end for globalists. There is almost no nation or institution they will not sacrifice if that sacrifice can be exploited to further their goal of total global political and economic dominance. They don’t just want a completely centralized system; they want all of us to BEG them to put that system in place. They want the masses to think it was all our idea. This is the most pervasive and effective form of slavery, when the slaves are manipulated into demanding their own enslavement.  When the slaves are fooled into believing their enslavement is something to be proud of — a badge of honor in service of the collective, if you will.

The fall of the U.S. will be no different in this regard. We do not necessarily have a supranational structure like the EU. So our narrative for collapse will be slightly different, and the engineered lesson we are meant to learn will be carefully crafted.

You see, Americans are meant to play the role of the spoiled imperialists who are finally getting what we deserve, an economic punch in our tender parts. We are the new Rome, bread and circuses and all. And when the U.S. comes crashing down like Europe, the Fabians will be there yet again to admonish the greed inherent in national sovereignty and the destructive aspirations of power that must be squelched by a more evenhanded global political system. I don’t really know how many people out there realize this, but we are meant to play the bad guys in the global theater being put on by the elites. Americans are the villains, the rest of the world plays the role of innocent victim, and globalist centers like the IMF and the BIS are meant to play the heroes, coming to the rescue of humanity when all appears lost.

Our debt generation by far outmatches that of the whole of EU nations combined, a fact I outlined in Part 3 of my series One Last Look At The Real Economy Before It Implodes.  Unlike Greece, though, the U.S. has the direct option to print fiat at will in order to prolong punishment for our massive debt spending. However, as we have seen with recent market reactions to the very notion of an interest rate hike by the Federal Reserve in September, such an event will trigger extensive outflows from stock markets and herald the end of the “new normal.” Again, why would the banksters do this? Why not keep interest rates at a constant near zero?  It is not as if there is any public pressure to raise rates; in fact, it’s quite the opposite. Why is the Fed ignoring the hundreds of signals showing that the U.S. is in a recession and pushing ahead with discussion of interest rate hikes despite what one might logically conclude would be in the Fed’s best interest?

The Fed knows that the only things propping up American markets are free money and blind faith by the public that banks and government will act to stop any pain or economic suffering, should such a potential for crisis arise. When the free money is gone and that faith disappears, then we will have an epic catastrophe on our hands. The globalists within the Fed know this, and they want this – at least , they want a controlled version of this. The elites NEED the fall of the current U.S. system exactly because this will make way for the rise of what they often term the “great economic reset.”  This reset is the next stage in the plan for total global economic centralization.

This is not about contagion. There is no such thing. It is an excuse, a scapegoat designed to distract from the real problem. This is about a concerted effort over the past several decades by internationalists to maneuver Western cultures into a position of vulnerability. When people are weak and frightened, they become malleable. Social changes you would have never thought possible today become very possible tomorrow in the midst of a crisis. I believe we are now seeing the onset of the next great crisis, and the fundamentals of economy support my view. When the entire European system hangs by the thread of Greek debt and the entire U.S. system hangs by the thread of near zero interest rates and blind market faith, something is about to shatter. There is no going back from such a condition. There is only the path forward, and the path forward is not pleasant or comfortable and it cannot be ignored.

We cannot forget that crisis is in itself a distraction as well. Whatever pain we do feel tomorrow, or the next day, or the next decade, remember who it was that caused it all: the international banks and their globalist political counterparts. No matter what happens, never be willing to accept a centralized system. No matter how reasonable or rational it might sound amid the terror of fiscal uncertainty, never give the beast what it wants.

There is a way out!

****************************************************************************************************

SHTFplan.com

Top CEO Warns Global Reset “Could Happen This Year”

Jun 24, 2015

By Mac Slavo

Over the last several months there have been numerous reports highlighting the frantic activities of the world’s ultra-wealthy elite. From the purchasing of emergency hideaways and airstrips to warnings from their financial advisors that it’s time to shift their assets into physical holdings, it appears that a lot of powerful people are afraid of a significant shift set to take place in the near future.

In his latest interview with Future Money Trends Keith Neumeyer, who recently penned a very public (and very viral) letter to the Commodity Futures Trading Commissions outlining the rampant manipulation by concentrations of shadowy market players taking place on commodities exchanges, shares his insights on what many believe to be a coming global reset.

According to First Mining Finance Chairman Neumeyer, the day of reckoning may come a lot sooner than most people think:

It’s in the cards for sure. Predicting exactly what it’s going to mean or what it’s going to look like… that’s the big challenge… I think a lot of people are ignoring it… but there are some forward thinkers out there who talk about it.

I think that the Chinese want their currency part of a floating currency… I think that’s really going to be the next leg in this whole change… in this reset going forward. It could even happen this year.

When this reset comes to pass the manipulations so apparent in commodities and broader stock markets today will be exposed and, according to Neumeyer, may lead to the biggest surge in precious metals we have ever seen.

Echoing the forecasts of one of the world’s leading trend strategists Gerald Celenete, Neumeyer notes that the monetary system that takes hold after a global reset could result in gold rising to $3000 an ounce or more. Such a move would have a similar impact on silver, which may stabilize at its historical silver-to-gold ratio of 16:1, putting its strike price somewhere above $150 an ounce.

Right now, you’re mining 10 ounces of silver for every one ounce of gold. So gold is trading at… let’s say $1,200 just to round it up. So that would be $120 silver, if the ratio was 10-to-1. So I say silver should be $120.

The other key ratio is the ratio that has been common for 500 years… Sir Isaac Newton came up with the ratio of 16-to-1 and that’s how they created the pound sterling. And so there was a theory that there was for every one ounce of gold, 16 ounces of silver in the earth’s crust. So using 16-to-1, at $1,200, it’s somewhere around $80-$90.

Silver should be trading, in my view, somewhere from $80 to $120 an ounce.

The prices Neumeyer cites are based on current trading levels, suggesting that silver is significantly under-priced already.

Now imagine what happens should we see a widespread crisis and subsequent global reset of the financial, economic and monetary systems. Markets are so fragile that even something as simple as China publicly declaring their true gold holdings could spark the next bull run in precious metals:

Of course it would and that plays back to what I was saying earlier. I don’t know if China’s ready for that to happen, because once they do it gold will probably go up by multiples… hundreds and hundreds of dollars.

I could see gold going up to $3,000 or some number like that.

Who knows exactly… but I do believe that that would occur because the people would see the hoard that the Chinese have actually accumulated over the last decade and that would completely change the market.

Countries like China and Russia are secretly accumulating massive stockpiles of gold and silver.

Business and EconomyFurther, the ultra-wealthy have been warned in no uncertain terms by their advisors to do the same.

If there were ever a tell-tale sign that a momentous set of events is soon to take place, this is it. Follow the money, which at this time just so happens to be shifting to physical assets of real value in anticipation of the next leg of the global reset.

This report is taken, in part, from Keith Neumeyer’s latest interview at Future Money Trends.

***

CNBC

Ron Paul: Stock market 'day of reckoning' is near

Amanda Diaz | @CNBCDiaz

Friday, 19 Jun 2015 | 8:09 AM ET

Despite record highs in the market, former Rep. Ron Paul says the Fed's easy money policies have left stocks and bonds are on the verge of a massive collapse.

"I am utterly amazed at how the Federal Reserve can play havoc with the market," Paul said on CNBC's "Futures Now" referring to Thursday's surge in stocks. The S&P 500 closed less than 1 percent off its all-time high. "I look at it as being very unstable."

In Paul's eyes, "the fallacy of economic planning" has created such a "horrendous bubble" in the bond market that it's only a matter of time before the bottom falls out. And when it does, it will lead to "stock market chaos."

As far as when the bubble will burst, the former Republican presidential candidate said, "I don't think there's any way to know what the [timeline] is, but after 35 years of a gigantic bull market in bonds, [the Fed] cannot reverse history and they cannot print money forever."

Of course, Paul has been known to make similar calls in the past, but even as stocks continue to make new highs, he remains just as convicted as ever that there "will be a day of reckoning" that will lead to a collapse in both the fixed income and equity markets.

"I think [the crash] is going to be much greater [than 10 percent] and it will probably go a lot lower than people say it should," said Paul. "I don't think it's going to be just a correction."

Paul added, eventually investors will "lose confidence" in the Fed, and when they do, the market could witness a "very big crash."

 G7 & THE BILDERBERG CONNECTION