By Jonathan Saul as well as Charles Regnier LONDON, May 7 (Reuters)– Leading vessel driver Euronav uploaded document high first-quarter outcomes on Thursday as well as anticipates solid need for oil storage space mixed-up to proceed in 2020, driving its shares up 8.5%.

The globe is still having problem with an oil excess because of a decrease in need triggered by the coronavirus also after leading oil generating nations have actually reduced result. The excess has actually motivated a shuffle to locate storage space choices ashore as well as sea.

Hugo De Stoop, president of Belgian team Euronav, claimed drifting storage space was “more likely to increase than to decrease”.

“At the moment we continue to be in a world that is oversupplied with oil and the oil has to go somewhere and the land storage is full,” he informed Reuters.

Euronav’s fleet presently consists of 42 huge unrefined service providers (VLCCs)– each of which can lug 2 million barrels of oil– in addition to 25 smaller sized suezmax vessels which can each lug 1 million barrels. It additionally has 2 megatankers each with an optimum ability of 3 million barrels.

De Stoop claimed 65 VLCCs worldwide had actually been fixed for at the very least 15 days, showing they were most likely to be keeping oil, with an additional 38 suezmaxes additionally holding oil mixed-up.

That would certainly suggest almost 170 million barrels of crude were hung on the water, which is a document high.

De Stoop claimed vessels were being parked in centers worldwide particularly around the UNITED STATE Gulf, the Middle East, Singapore as well as South Africa, including that 5 of Euronav’s VLCCs got on agreements with storage space choices.

The unrefined market has actually been selling what is referred to as contango, where ahead rates are greater than instant rates. This market framework motivates investors to park barrels in storage space in the hopes of offering them for a revenue later on.

De Stoop claimed “the first phase” of storage space passion was driven by investors wanting to take advantage of the contango.

“Today, the requests that we are receiving are very different – it’s not from traders, it is from people who are looking for space to store the oil that has been produced,” he claimed.

The business claimed it was prematurely to measure the lasting effect of the coronavirus on its outcomes after it reported first-quarter profits prior to passion, tax obligations, devaluation as well as amortization (EBITDA) of $327.9 million, up from $125.3 million in the very same duration a year back.

The business’s shares were up 8.5% at 1039 GMT.

KBC Securities claimed Euronav was well established for a “great” second-quarter. (Editing by Emelia Sithole-Matarise as well as Elaine Hardcastle)

( c) Copyright Thomson Reuters 2019.