Are VLCC Rates Poised For Rebound?

Very Large Crude Carriers, which were scraping the bottom of the freight market at the end of January, look set to make a comeback as the pool of available tonnage runs dry. "We currently anticipate a maximum of 54 vessels within the area (Middle East Gulf) over the next 30 days, and it is significant that only 28 of these are modern," said London tanker broker Gibsons. "There is every indication that owners will capitalize on this shortage over the coming weeks," it added. The sentiment was mirrored by Oslo broker Fearnleys, which forecast continued high freight levels. Friday fixture lists showed eastbound VLCCs from the Mideast Gulf were commanding rates as high as W90, for example an SK fixture to South Korea, five points up on last Friday's market rate. Westbound VLCCs are earning about W83. While VLCC rates from West Africa fell by 15 points this week in a very quiet transatlantic market, million-barrel tankers arrested the fall that saw them lose 20 points last week, both in West Africa and in the Med. Friday's fixture lists showed a flurry of million-barrel fixing in Atlantic basin markets, with West Africa to U.S. destination being done at around W100. Cross-Med rates are about W117. For the third week running, it was the smaller Caribbean ships that were fetching the healthiest rates. Upcoast 70,000 ton cargoes were consistently being fixed in the W215-W225 range. - (Reuters)