December 3, 2008 / 8:35 AM / in 11 years

UPDATE 1-BP books supertanker for US Gulf storage-shippers

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By Luke Pachymuthu

DUBAI, Dec 3 (Reuters) - Oil major BP (BP.L) has booked a supertanker capable of storing around 2 million barrels of crude at sea, becoming the latest firm to bet that it could get a higher price for holding onto oil rather than selling now.

BP’s booking takes the total capacity booked for storage by oil firms and traders to at least 12 million barrels, nearly 15 percent of one day of world oil demand. In November, U.S. oil trader Koch and major Royal Dutch Shell (RDSa.L) booked vessels to store around 10 million barrels of crude.

BP booked the Eagle Vienna to load a cargo of North Sea oil for transport to the U.S. Gulf for storage, shipping agents said on Wednesday.

U.S. crude CLc1 settled at its lowest price for 3.5 years on Tuesday at under $48, a fall of over $100 from the July peak. The economic crisis has eaten into oil demand and OPEC producers have struggled to cut supplies quickly enough to match slumping consumption in developed countries.

Oil firms were betting that the cost of hiring vessels at current depressed rates would be less than the gains from waiting for an upturn in crude prices and in refiners’ profit margins.

Although prompt delivery oil is very weak at just over $47 a barrel on Wednesday CLc1, contracts for March were over $50 and for April nearly $52.

Reporting by Luke Pachymuthu; writing by Simon Webb; editing by William Hardy

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