A further 12-13 ships are potentially being utilized for floating storage, he added, although tanker fixtures could also indicate that these vessels may still be in the process of delivering or loading crude, and not simply employed as storage. If all the vessels identified by SSY are in fact storing crude oil, it would suggest just over 70 million barrels of crude is currently being stored afloat. Demand for VLCCs for use as floating storage has been rising since late last year, as a combination of lower freight rates and a wide contango in oil futures prices - where near term contracts trade at a discount to those further into the future - have allowed traders to turn a profit from buying spot crude and locking in a higher selling price for delivery further in the future. Last week, the International Energy Agency reported that the amount of crude oil currently being stored in oil tankers has swelled to between 50 million and 80 million barrels, highlighting weak demand for both oil and sea borne transport.
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