US oil firm Koch Supply and Trading has booked a supertanker to store around two million barrels of crude offshore in the United Arab Emirates, industry sources said on Thursday. Koch booked Artemis Glory for six months, the sources said. The ship was likely to sit offshore near the Middle East fuel bunkering hub of Fujairah, on the east of the UAE, they said.
"They are either going to store Basrah or Oman crude, or they could be co-loading two different types of crude," a regional based crude oil trader said. Koch already has around 10 million barrels of crude floating on ships in the US Gulf Coast, industry sources said. The research arm of ship broker Simpson, Spence and Young (SSY) said in January up to 73 million barrels of crude oil was possibly being stored on supertankers.
Oil traders said the trend to stockpile oil at sea has developed because primarily oil storage facilities on land are full, and the forward sale prices on crude oil looks more attractive than the front month. "The contango justifies the floating storage, besides demand is so bad at the moment where are you going to push the oil too, especially when the drawdown from inventories is so thin," a Western crude oil trader said.