# Oil traders hire suopertankers



## spongebob (Dec 11, 2007)

Our local paper reports that the collapse of global oil prices has prompted commodity traders to start hiring supertankers as storage vessels in order to profit from stockpiling crude oil at sea.
Vitol, the world's largest independent oil trader is understood to have booked the T1 Oceania ultra large crude carrier, one of the world's largest ocean going vessels in the world, for the job.

Seems like a risky way to earn a bob or two.

bob


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## Hugh Wilson (Aug 18, 2005)

It's quite a normal thing to do when oil prices are low. VLCC charter rates have risen from US$15000 to US$83000pd because of this.


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## kypros (Feb 13, 2010)

But they could get stung according to FT reports the US has only a third of its storage capacity full,and projections are for low oil prices to continue for up to five to ten years,the gas fracking to continue around the world pulling the rug on the oil rip off and long may it continue they have had the gravy train for to long.KYPROS


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## callpor (Jan 31, 2007)

Of course Vitol is huge and is almost certainly hedging any risk. In the mid 1980's many correspondents will recall that in similar cir***stances of supply/demand imbalance "floating storage" became the fashionable modus operandi, when the price of oil was balanced precariously. There must have been several scores of VLCC's anchored in strategic locations round the world at the time, full of crude which rose in November 1985 to a price of $31.75 /bbl on the Nymex, belaying the threat of a price collapse. Following an OPEC meeting shortly thereafter the price of crude plummeted to as low as $6/bbl! The oil majors and big players had planned for such a situation but many of the smaller traders got caught and lost their shirts. It will be interesting to see what happens on this occasion and who blinks first? Perhaps the low prices will continue for several years, lets hope so.


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## William Clark8 (Feb 15, 2013)

*VLCCs*



Hugh Wilson said:


> It's quite a normal thing to do when oil prices are low. VLCC charter rates have risen from US$15000 to US$83000pd because of this.


That"s being going for years, since they started building VLCCs


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## Erimus (Feb 20, 2012)

William Clark8 said:


> That"s being going for years, since they started building VLCCs


.........and before that too when tankers were 50,000 or less.
geoff


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## callpor (Jan 31, 2007)

spongebob said:


> Our local paper reports that the collapse of global oil prices has prompted commodity traders to start hiring supertankers as storage vessels in order to profit from stockpiling crude oil at sea.
> Vitol, the world's largest independent oil trader is understood to have booked the T1 Oceania ultra large crude carrier, one of the world's largest ocean going vessels in the world, for the job.
> 
> Seems like a risky way to earn a bob or two.
> ...


Hi Spongebob,

More meat around those reports today with news that up to 20 VLCC's have been fixed this month with floating storage options. See http://www.hellenicshippingnews.com...likely-storage-of-up-to-30-mil-barrels-crude/

Chris


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