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Frontline says high oil supply leading to 'forced storage'

Frontline says high oil supply leading to 'forced storage'
Tanker giant Frontline is seeing what it describes as “forced storage” as unsold cargoes are loaded onto vessels while awaiting a buyer.

Speaking about the current state of the tanker market Frontline ceo Robert Macleod said the high supply of oil was leading to unsold cargoes.

“What we are seeing now is vessels awaiting orders in various ports and places around the world simply due to the high supply of oil leading to unsold cargoes -- on ships. And let’s call that forced storage and we expect that to remain a factor going forward,” he said in a transcript of the call published by Seeking Alpha.

Asked further about the situation Macleod said it was hard to quantify but was something they were seeing happen regularly.

“As for the forced storage, its difficult to put numbers on that, but just speaking of our own fleet, we have on many occasions this year been told to say, we’re loading the Middle East we’ve been told to sit in Fujairah or Dubai for 10 days, or 15 days or 20 and then the same situation in Singapore where there simple is the cargo is unsold and there’s no sort of choice trade or oil company side than to let us wait until they know the direction we’re heading,” he explained.

On the tanker market in general Frontline estimates there will be an in improvement in the fourth quarter of the year.

Frontline also expects to complete its merger with Frontline 2012 in the further quarter when it will have fleet of 70 tankers and 20 newbuildings on order.