Shell, Koch Contract 4 Supertankers for Storage in U.S. Gulf
>>>Commander. Weren't you around back in '98 when they had a fleet of about 500 of these these "storage tankers" hidden in the Straits of Magellan - just waiting for the slightest price increase for an opportunity to sell....and drive crude from $10 down to $5???<<<
By Todd Zeranski
Dec. 4 (Bloomberg) -- Royal Dutch Shell PLC and Koch Industries Inc. hired four supertankers to store oil in the U.S. Gulf Coast to take advantage of higher futures prices for crude in the months ahead, according to a shipbroker.
Shell and Koch hired the so-called VLCCs, or Very Large Crude Carriers, to move oil from the Middle East to the U.S. Gulf and hold it offshore, Bruce Kahler, a broker at Lone Star, R.S. Platou in Houston, said today.
The oil futures market is now in “contango,” meaning prices get higher in later delivery months. Contango encourages traders to store barrels rather than selling them now.
Crude oil today fell below $44 a barrel to the lowest since level since January 2005. New York crude for delivery in December 2009 is trading at $57.36 a barrel.
A supertanker would cost about 90 cents a barrel per month for storage, according to data from shipbroker Galbraith’s Ltd. VLCCs can carry as much as 2 million barrels of oil.
Frontline Ltd., the world’s largest owner of very large crude carriers, or VLCCs, said Nov. 28 it leased out two vessels for storage and was working on a third such transaction. |
