Oil companies and traders are storing enough oil in supertankers to supply the world for one day, in one of the most striking signs of supply outstripping demand as the impact of the economic crisis overshadows a string of Opec production cuts, the FT reported. According to Deutsche Bank’s oil trading desk “over 80m barrels of oil is now on floating storage”, double the industry assessment of about 40m-50m last month. Investment banks are joining oil companies and traders and entering into floating storage deals. The oil is stored in supertankers capable of carrying about 2m barrels – known as VLCCs – and in smaller tankers of 1m barrels, known as Suezmax.

This entry was posted by Stacy-Marie Ishmael on Wednesday, January 14th, 2009 at 5:14 and is filed under Commodities. Tagged with contango, oil, shipping. Edit this entry.