LONDON (Reuters) - Traders have chartered at least five supertankers in the past day with options to store oil at sea as global stocks mount after the United States ditched plans to purchase oil for its emergency reserve, shipping sources said on Friday.
Shipping sources said the vessels – each of which can carry a maximum of 2 million barrels of oil - were booked for storage options of at least three months to take advantage of a widening contango market structure, when cargoes for short-term delivery are cheaper than those for later delivery.
In such instances, oil majors and trading houses charter ships to store oil they produce or buy cheaply from the market, betting they can resell at a profit when prices recover.
The charters add to earlier bookings this month for storage at sea by oil players including Royal Dutch Shell and Glencore, sources have said.
(Reporting by Jonathan Saul, Julia Payne and Ron Bousso in London and Shu Zhang in Singapore;Editing by Elaine Hardcastle)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Mar 28, 2020 00:07:51 IST