This is the strongest interest to store diesel onboard ships in Europe in more than a year.   Vitol has booked three ships for prompt loading, and Hetco and Noble fixed one each. Koch and BP were also in the market, looking for ships to store gasoil.  
The storage move was motivated by a “profitable” forward price curve, and favorable diesel price differentials on both sides of the pond. The need to store could also be due to players finding it more profitable to sell later than in the relatively oversupplied prompt Northwest European spot market.  
A company or player may opt to store fuel onboard the ship if it does find a suitable outlet for its cargo at the price sought.  
In the past several months, the U.S. Gulf Coast has been pushing at least two to three Large Range vessels loaded with ULSD a month towards Europe. The U.S. is facing a growing record-high ULSD inventory and jacked-up distillates production due to robust crack spreads. At the same time, Europe and South America have become regular outlets, helping to keep a lid on the burgeoning supplies.  
Despite the recent interest in contango play in Europe, the ship-booking activity pales in comparison to the astounding number of ships booked for floating storage purposes more than a year ago.   The number of tankers storing gasoil in Europe then rose to more than 100 as traders took advantage of a wide $10-$15/ton intermonth price contango.  
The current intermonth gasoil price was pegged at only about $3/ton.   Some traders had said that the $3/ton contango spread was not expected to cover the vessel storage costs. The relatively narrow contango price spread is unlikely to trigger a frenzied play for floating storage in Europe.  
However, it is noted that different trading companies have different economics, depending on demand/supply balance, cargo price, supply position in market and freight rates.  
Vitol kicked off the floating storage play more than a week ago, booking the first floating storage ship, Ellie Lady, at about $15,750 a day for at least a two-month period, with an option to extend another 30 days.   Vitol went on to book two other ships late last week.  
SKS Dee and Galway Spirit were chartered by Vitol at $16,000-$17,000 a day for 30 to 60 days for storage purposes in Europe.  
Hetco booked Suvretta to load on Feb. 16 at $15,750 a day, and Noble fixed Paramount Halfax to load on the same day at an undisclosed rate.  
BP and Koch tentatively booked ships last week, but the fixtures failed.