FB: UPDATE 1-Crude at sea around 100 mln barrels-Frontline
By Jonathan Saul
LONDON, Aug 6 (Reuters) - Frontline ( FRO - news - people ), the world's biggest independent oil tanker shipping group, said on Thursday around 50 very large crude carriers (VLCCs) were storing crude oil, particularly in the U.S. Gulf and off Europe.
An oil price structure known as a contango has encouraged oil companies to store crude oil in tankers anchored at sea this year with a view to selling it for a profit later.
But that structure has narrowed over the last few weeks for North Sea crudes, while it remains attractive for many U.S. grades.
'50 VLCCs approximately are being used as storage right now,' Frontline Chief Executive Jens Martin Jensen told Reuters.
'That is around 100 million barrels if its 2 million (barrels of crude) per ship,' he said in a phone interview.
At its peak in April, well over 100 million barrels of crude oil was stored at sea around the world -- much of it in VLCCs, traders and analysts said.
'The height of the storage was around 60 VLCCs,' Jensen said.
'The contango is still there. It has gone down from what it was three months ago, but there is still some incentive to do it,' he said.
Traders have said more crude oil was being stored in the U.S. Gulf.
'I don't know the exact split, but I think there should be more in the U.S. Gulf than in Europe,' Jensen said without giving further details.
Industry sources have said there had been interest to store crude oil among investment banks.
Jensen said holding crude on the high seas was being done mainly by oil companies and oil traders.
(Editing by Sue Thomas) Keywords: OIL STORAGE/FRONTLINE
