Marine Link
Monday, June 25, 2018

Frontline Expects VLCC Storage Play to Rise

Maritime Activity Reports, Inc.

June 16, 2017

File Image (CREDIT: AdobeStock / (c) Carabay)

File Image (CREDIT: AdobeStock / (c) Carabay)

Tanker firm Frontline, controlled by billionaire investor John Fredriksen, expects a growing number of supertankers to be used for storing crude in anticipation of higher oil prices, its chief executive told Reuters on Friday.
While none of Frontline's own vessels are currently used for this purpose, independent shipbrokers estimate that around 10 of the world's very large crude carriers (VLCCs) have recently been contracted for oil storage.
"It sounds correct, and the number is rising," Frontline Chief Executive Officer Robert Macleod said.
"It's always an option," he added.
Frontline has 20 VLCCs, each of wich can carry around 2 million barrels of oil.
VLCC spot rates are currently below Frontline's cash break-even level of $22,300 per day, trading at just $15,000-20,000 and making storage relatively inexpensive for those who think oil prices will rise.
Later in the year, the cost of renting ships will likely rise however as the demand for crude picks up.

"We expect a seasonal improvement in third quarter. Atlantic volumes to Asia are expected to rise, and including seasonal factors we expect the market to improve," Macleod said.


Reporting by Ole Petter Skonnord 

Maritime Reporter Magazine Cover Jun 2018 - Green Marine Technology

Maritime Reporter and Engineering News’ first edition was published in New York City in 1883 and became our flagship publication in 1939. It is the world’s largest audited circulation magazine serving the global maritime industry, delivering more insightful editorial and news to more industry decision makers than any other source.

Maritime Reporter E-News subscription

Maritime Reporter E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

Subscribe for Maritime Reporter E-News