With the long-dated oil futures prices surging past near-term one (contango), we're back to oil being hoarded at sea in VLCC (very large crude carrier) tankers as traders arbitrage near-term vs. longer-term futures contracts. But just how much oil is currently adrift as a result of such arbitrage? Well it seems no one really knows for sure.

Reuters: ICAP Shipping estimated 29 VLCCs were storing crude globally, rising from 24 VLCCs two weeks ago. It estimated that 10 VLCCs were holding crude in the U.S. Gulf, 10 off the coast of Northwest Europe, seven off West Africa, one in the Mediterranean and one in the Far East. [FYI - Each VLCC can carry about 2m barrels]

Frontline (FRO.OL), the world's biggest independent oil tanker shipping group, told Reuters on Thursday around 50 VLCCs were storing crude oil, particularly in the U.S. Gulf and off Europe.

A crude oil trader at a large independent trading house estimated between 70 million and 100 million barrels of crude were stored globally.

The message is simple, expect higher oil prices as your base case.

Gibson Shipbrokers: In terms of OPEC production and tanker demand, we could now be at a turning point. Most commentators are suggesting that by the end of this year or the early part of next year there will be a bounce-back in the key economies and so a return to year-on-year growth in oil demand. Current indications are for an increase in oil demand of 0.5-1.5 million b/d next year. Taking the middle ground and assessing the oil supply/demand balance, this would indicate Middle East OPEC production increasing by close to 1 million b/d over the next 18 months.