OSLO, June 16 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, editing by Terje Solsvik)