JP Morgan Chase has hired a very large crude carrier (VLCC) newbuildings to store heating oil off the coast of Malta, following the current trend storing crude or oil products at sea.
For the job, the US bank has hired the 300,000 dwt Front Queen for nine months at a rate of $41,000 per day, on top of paying a $1.6million (1.15million) bonus to ballast the ship from China to Malta. The move is unusual as it will be the US banks first such booking in at least five years.
The hiring of the VLCC throws further weight behind the current trend of financial and trading companies storing oil and crude at sea in order to take advantage projected of higher prices later in the year.
Heating oil for immediate delivery costs $555 per tonne in northwest Europe, while supplies for August are at $582.
VLCCs are normally not used to store heating oil because their tanks have to be scrubbed of crude oil first, but newbuildings do not have that problem. The ships can hold about 2 million barrels of heating oil, more than three times the amount held by a long-range two tanker. Several traders are reported to have inquired about similar transactions.