Americas News
Frontline: VLCC Rates Strong As Demand for Floating Storage Rises
Oil shipping company Frontline Ltd. is predicting continued demand and solid freight rates for oil tankers going into the new year, reports Reuters.
Tankers will be helped in 2015 by the ongoing collapse in oil prices, according to CEO Robert Hvide Macleod, adding that current rate levels were sustainable.
"We still see a solid demand and rates are holding up well, even though they are down slightly from the top," he said.
"The bunker fuel price helps us and the market is holding up well."
The drop in oil prices has sent buyers rushing to take advantage of the opportunity to stockpile supply, which has in turn boosted demand for tankers used as storage, said Macleod.
Since mid-October, very large crude carrer (VLCC) rates have doubled to between $55,000-$60,000 per day.
"A lot of people are looking for storage units, especially in the West," he said.
A significant portion of the increased supply of oil is coming from the ramp up of shale gas production in the U.S, though Russia has also been a major producer.
Earlier last month, it was reported that VLCC rates had reached five-year-highs on the backs of rising demand for floating storage.
