Demand for tanker storage surges as traders stockpile oil

 January 15, 2015

Oil tanker owners have reported a surge in demand for large vessels as traders look to take advantage of low prices to stockpile supplies.

Oil companies are reportedly looking to hire supertankers to store at least 20 million barrels of crude, Fuel Fix said.

Greek shipping company Dynacom Tankers Management said companies have already booked a “handful” of very large crude carriers.

With oil prices falling by over 55 percent since July some traders are looking to capitalize before prices recover.

Austria-based consultant JBC Energy said traders could store anywhere from 30 million to 60 million barrels in carriers during the next few months.

In 2009, the last time oil hit $50 per barrel, Bermuda based tanker provider Frontline said investors stored about 100 million barrels in tankers.

“The re-emergence of floating storage is what could move the crude tanker market this year from being rather good to possibly very very good,” Pareto Securities analysts Eirik Haavaldsen told Fuel Fix.

Shipping rates ticked up during trading Tuesday, with day rates for supertanker shipments from Japan to Saudi Arabia rising one point to $82,216 per day.