NEW YORK (Bloomberg) — Citigroup Inc.'s commodities-trading unit followed BP Plc and Royal Dutch Shell Plc in anchoring a full oil tanker offshore northern Scotland to profit from higher prices later this year.

Phibro LLC is keeping up to one million barrels of the North Sea Forties grade of oil in the Ice Transporter near the Orkney Islands, according to people familiar with the matter. Phibro is seeking to make money from contango, a market where buyers pay more for delivery later in the year than they do today.

Citigroup's trade shows how the contango, caused by an inventory surplus onshore, is attracting more traders to hoard oil. Brent crude for January 2010 settlement sells for $59.68 a barrel, 32 percent above the contract for next month. Stockpiles surged as recession reduced demand, while forward prices remain higher on forecasts Opec cuts will start to curb excess supply.

"We anticipate more ships to be chartered as storage," Erik Jensen, an analyst at Lorentzen & Stemoco AS in Oslo, said by phone. "Anyone can do it, it's no problem to charter a ship, it's pretty much risk free to do so."

Shell and BP, Europe's largest oil companies, both have oil stored at sea near the UK Frontline Ltd., the world's biggest operator of supertankers, said yesterday oil traders want to charter as many as 10 additional vessels to stockpile crude.

Ice Transporter, a double-hulled vessel, is capable of carrying one million barrels. The ship has anchored at Scapa Flow in the Orkney Islands since December 24 and has an option to remain there for three months, Captain William Sclater, operations manager at the port, said in a telephone interview.

While Phibro used to be a "huge" hirer of tankers in the 1990s, it hasn't booked vessels for "many years", said Per Mansson, managing director of shipbroker Nor Ocean Stockholm AB.

Citigroup spokesman Jeffrey French declined to comment when contacted by e-mail.

BP is also storing Forties crude at Scapa Flow, the port manager said. The two million-barrel supertanker Eagle Vienna arrived there on December 14. "We have had a few enquiries," to store oil at the harbour, Sclater said. "Two have matured so far."

The Hague-based Shell, Europe's largest oil company, chartered the supertanker Leander in November with an option to store Forties crude, according to Paris-based shipbroker Barry Rogliano Salles.

The vessel arrived at Scotland's Hound Point, the loading port for Forties, on November 20, according to tracking data compiled by Bloomberg. The vessel has remained anchored at Lowestoft on the eastern coast of the UK since November 28.

To profit from contango, oil companies and traders must be able to cover the cost of storing, insuring and financing the cargo. A supertanker would cost about 90 cents a barrel a month for storage, depending on the length of the rental, according to data last month from shipbroker Galbraith's Ltd.