Traders in Asia look for tankers to store oil, bet on crude prices to rise

(Repeats item following technical glitch)

* Unipec charters carrier to store crude; Total (NYSE: TOT - news) on the lookout

* Bets on price recovery in Q4, oil contango to cover some costs

By Keith Wallis and Florence Tan

SINGAPORE, Sept 5 (Reuters) - Trading companies operating in Asia are seeking to charter supertankers to temporarily store crude, shipping and trade sources said on Thursday, hoping for highher prices with the coming Northern Hemisphere winter.

A state Chinese trading company has already made a booking, while a second trader, reluctant to sell its cargoes after spot differentials hit multi-year lows, is in talks to charter a vessel. Another four have been looking for ships, the sources said.

Oil benchmarks in Europe and the Middle East are also in their strongest contango market structure since 2010, an indication that prices could rise in the last quarter of the year to help cover storage costs and earn a profit.

Brent futures flipped into steep contango - when future prices are higher than spot - last month, encouraging European trading firms to store North Sea and African oil onboard suezmaxes in Africa.

"Freight is cheap and the oil price is relatively low," a shipping source in Asia said. "We're going into winter so demand is very likely to get stronger."

Unipec, the trading arm of Asia's largest refiner Sinopec , has booked a tanker to store crude, while Totsa, the trading unit of French energy firm Total, is in search of a ship to hold oil in the Middle East, shipping and trade sources said.

Four other western and Japanese companies are also seeking ships, the sources said.

Unipec chartered the ultra large crude carrier (ULCC) TI Europe around Aug. 20 to store crude off Singapore, two shipbrokers said. Unipec is paying $25,600 a day for six months for the ship that can store around 3 million barrels of oil.

A trader said Unipec's charter may be used to store sweet crude produced in Asia and West Africa, which Chinese buyers snapped up in September when spot differentials hit multi-year lows.

MIDEAST

Sellers could also store Middle East crude loading in September and October after differentials for those grades slumped to multi-year lows.

"I believe that contango and differentials may justify it," a trader with a Western firm said, adding that very large crude carriers (VLCCs) - which hold 2 million barrels - are very cheap in the Middle East.

Freight rates for a one-year charter for VLCC have averaged just over $26,000 a day this year, according to data from British shipping services agency Clarkson (LSE: CKN.L - news) .

Totsa's shipping arm CSSA is in talks to charter a VLCC to store crude in the Middle East from September for a year with an option to extend for another two years, the shipping source in Asia said.

Japan's JX Nippon Oil & Energy Corp and Mitsui & Co are among the firms which have asked ship brokers for prices to charter VLCCs for short term storage, two shipbrokers said. Short-term storage involves leasing tankers for 30-60 days.

Dutch trader Trafigura and oil major Shell (LSE: RDSB.L - news) are also looking at ships, said one Singapore-based VLCC ship broker.

Still, some traders said the Dubai contango isn't steep enough to cover storage costs and profits will depend on a spike in demand to lift prices.

"I don't think oil refiners will take on too much risk to store and trade," a Japanese trader said. (Reporting by Keith Wallis, Florence Tan, Jacob Gronholt-Pedersen, Jane Xie in Singapore and Osamu Tsukimori in Tokyo; Writing by Florence Tan; Editing by Aaron Sheldrick and Tom Hogue)