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Monday, December 5, 2016

Tanker Blood-bath Continues

August 10, 2001

Friday's dirty tanker fixture lists revealed the full extent of this week's blood-bath on VLCC trades from the Mideast Gulf. Rates collapsed by 15 percent overnight on Wednesday as shipowners scrambled to book voyages out of the Gulf before September 1 when OPEC cuts are expected to hit tanker demand, brokers said. Exxon mobil (XOM) fixed the Starlight Jewel for a 275,000 ton cargo to Singapore loading July 24 at W43.5 (about $0.42 per barrel), brokers said, compared to estimates of the route at W50 on Wednesday afternoon. Friday fixture lists showed a further two bargain-basement fixtures: Taurus booked the Napa for a 270,000 ton westbound September cargo from Al Bakr at W40.5 ($1.15 per barrel). Gunvor paid slightly more, W42.5, to load a small 220,000 ton westbound September cargo from Al Bakr onto the VLCC Crete. Brokers said shipowners had been falling over each other to corner the Exxon Mobil cargo, which took the eastbound market down by nearly nine cents per barrel on Wednesday night. "For Exxon it was like taking candy from a baby," said one London broker. "It's been a quiet week and people are just very scared of September," he added. OPEC agreed on July 25 to cut output for a third time this year from September 1 by a million barrels per day, or four percent, bringing its total 2001 cuts to 3.5 million bpd. Eastbound tanker rates climbed steadily throughout 2000 to hit a highpoint of over W195 in November ($3.30 per barrel on voyages to Japan). Rates crashed to an 18-month low of around W40 in mid-June on fears that the suspension of Iraqi exports would affect demand. Iraq, still under United Nations sanctions imposed after the 1991 Gulf War, suspended oil exports for the month of June to protest at a U.S./British plan to revise the sanctions terms but renewed deliveries once the plan was withdrawn. Since mid-June rates had been slowly recovering until Wednesday. - (Reuters)


 
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