Tanker rates have plummeted over recent weeks, sending VLCC owners groping around for the bottom of the market, which, according to brokers, has apparently been found.
At W85 for VLCCs going east and W83 for west from the Mideast Gulf, rates appear to have halted their slide toward the end of the week, brokers said. Last Friday, eastbound rates stood at W92 and westbound rates were close to W90.
But while VLCCs appeared to have found their floor, million-barrel tankers seemed to have crashed through another level and were still headed earthwards.
"I can't really explain it, and I don't see much sign of imminent recovery," said one London tanker broker.
While routes in the Mediterranean and out of West Africa lost 20 points over the whole of last week, they lost the same amount in just one day this week.
Friday fixture lists show two failed fixtures from West Africa by Sun at W120 and one solid one by Hess to St Croix at W117.5. This compares with W157 for the same route last Friday.
The continued absence of Iraq from the Mediterranean market has also had an impact.
"We saw Ceyhan starting to flow, but that never really happened, and what was done was done on VLCCs," said a London broker.
Oslo brokers reported on Friday that Saras had taken a million-barrel ship from Sidi Kerir to Italy at W115, although market rate is closer to W124. The route stood at W163 on Jan. 26.
While tanker rates around the world tumbled, the Caribbean held firm. Having bottomed out the week before last at W180, and having crept back up to W195 last week, fixtures at W197 are becoming increasingly common.
Coastal paid W205 for a fairly prompt 70,000-ton fixture from the East coast of Mexico to the U.S. Gulf.
Similar sized ships are earning W178 in the North Sea market and about W220 in the Mediterranean. - (Reuters)