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Oil Glut Spurs Top Traders to Book Supertankers for Storage at Sea

Some of the world's largest oil traders have this week hired supertankers to store crude at sea, marking a milestone in the build-up of the global glut.Trading firms including Vitol, Trafigura and energy major Shell have all booked crude tankers for up to 12 months.

They said the flurry of long-term bookings was unusual and suggested traders could use the vessels to store excess crude at sea until prices rebound, repeating a popular 2009 trading gambit when prices last crashed.The price of Brent crude is now around $8 a barrel higher for delivery at the end of 2015, with its premium rising sharply over spot prices this week due to forecasts for a large surplus in the first half of this year, in a market structure known as contango.

Vitol, the world's largest independent oil trader, has booked the TI Oceania Ultra Large Crude Carrier, a 3 million barrel capacity mega-ship that is one of the biggest ocean going vessels in the world by dead weight tonnage (DWT).

The fixture lists, provided to Reuters by tanker brokers and oil traders, also showed Vitol has booked the 2 million barrel Maran Corona Very Large Crude Carrier (VLCC), while Swiss-based trader Trafigura has hired at least one VLCC, the Nave Synergy. Shell has taken two VLCCs, the Xin Run Yang and Xin Tong Yang, the lists showed.

"In 2009 freight rates were extremely low and owners were willing to put their ships out on charter in order to mitigate weak spot rates," said Christian Waldegrave at leading tanker owner Teekay.

(guardianlv.com Edited by Topco)