The rising volumes of crude being stored offshore could signal that onshore storage availability is tightening, according to a report from Bloomberg.
Tankers International CEO Jonathan Lee told Bloomberg that 14 to 16 Aframax-class tankers are now storing as many as 9 million barrels in northwest Europe.
A crude market condition known as contango could be prompting traders to hold crude in offshore storage.
Contango occurs when the future price of a commodity is above the expected future spot price.
According to data collected by Bloomberg, the difference between Brent crude contracts for January and Feburary rose to $1.18 per barrel this week, the widest spread since April 2015.
Lee told Bloomberg that a shortage of onshore storage capacity, rather than contango, is likely behind the rise in offshore storage usage.
The International Energy Agency (IEA) said earlier this month that OECD commercial stocks fell in September by 17.1 million barrels to 3.068 billion barrels.
While that dip marked the second straight month of declines, the IEA warned that preliminary data points to renewed crude stock builds in the United States and Japan.
The IEA added that there is “little evidence” to suggest that economic activity will be “sufficiently robust” to stimulate higher oil demand growth in 2017.