Tanker – leasing speculators gamble on oil increase

(With Agency report)  
Another batch of five Very Large Crude Carriers (VLCCs) are likely to be  taken on charter during January to store crude oil, bringing the total number of supertankers brought into use as storage facilities for crude oil this month to more than 25. The Times of London quotes Jens Martin Jensen, acting managing director and chief executive of Norwegian shipping group; Frontline as calling it the strongest demand in many years. “We are having new inquiries every day. At least 25 vessels have already been booked and I would expect the number to reach at least 30 by the end of the month.”
Jensen says that a number of different groups including BP, Royal Dutch Shell, Eagle Vienna and US company Koch have leased tankers for this purpose.
“It’s a new situation, there has been a very strong demand for VLCCs over the past weeks,” said a broker at Barry Rogliano Salles, the French company. He called it a speculation on the price of oil. “They are just hoping that the prices will increase.” The gamble follows the dramatic drop in the price of crude from over US$100 a barrel – it topped at a record $147.27 per barrel in July 2008 and is now trading for little more than US$40 a barrel.