Four of the five vessels, each with capacity to hold 90,000-ton cargoes, are said to be used for refined products and a fifth for storage of dirty products.

The charter rate, around $17,500 daily, is significantly less than the daily rate to charter a newer Long Range 2 product tanker, which is typically used for shipping 90,000-ton cargoes of refined products.

The vessels are the SKS Tana and SKS Tyne, as reported yesterday, as well as the SKS Trent, SKS Tagus and the SKS Tweed, market sources said. The latter ship will take dirty products.

OBO ships can ship either dry bulk or wet cargoes but the age of these vessels (15 years or older) makes them cheaper and therefore more attractive for traders looking to make floating storage economics work.

The market contango for distillates in Europe is currently not seen as wide enough to support floating storage at current futures values when looking at shipping rates for conventional tankers.

Traders are also delaying and diverting tankers carrying middle distillate into Europe amid a surplus of the refined product and shortage of immediately available onshore storage.

Three jet tankers, SKS Dee, SKS Douro and STI Park are currently seen diverting around the Cape of Good Hope from the Middle East or Asia rather than taking the shorter, conventional trip via the Suez Canal, according to the OPIS Tanker Tracker.

Meanwhile six tankers with 4 million barrels of jet fuel were yesterday noted at anchor outside ports in Le Havre, Portbury or Gibraltar instead of berthing and discharging.