VLCC Rates Ease Slightly, But Busier Time Could Be Ahead

Monday, September 20, 1999
Large tanker rates slid back slightly off recent highs this week as Middle East September stems drifted to their conclusion, brokers said. VLCC rates for Japan, which peaked at W52.5 at the end of last week, slid back to around W50 while western rates fell back to about W47.5 from a peak of W50. Late week VLCC fixtures included two Bayoil charters for Bergesen vessels to the U.S. Gulf from Al Bakr at a soft W47-47.5 for well ahead October 10 and 20 sailings. Some brokers said expected October stems next week would mean a busier time with rates picking up, but Galbraiths noted that the Bayoil and two Chevron October charters at the same rates and similar October dates showed market weakness. The Suezmax market also eased back from the W67.5-70 hit early in the week for West Africa to the U.S. Gulf and Atlantic coast - settling at around W65-67.5. Million barrel rates in the Mediterranean also rose early in the week to settle around W65 for cross voyages and W67.5 to 70 for UK/Continent trips following the return of Russian export cargoes from the Black Sea. Forward tonnage forecasts showed a lack of ships in the west to trade to the U.S. suggesting that rates could continue to creep upwards for Suezmax tankers, brokers said. Far Eastern inquiry for West African oil led to three VLCC fixtures at rates of around W40-42.5 to Korea. Aframax rates for the Mideast to the Far East, though, were likely to come under pressure as a result of rescheduling due to Australian refineries refusing to take vessels carrying Indonesian crude, E.A. Gibsons said in its weekly report. Aframax rates in the North Sea were largely unchanged at around W80 and in the Mediterranean at between W77.5-82.5, brokers said. Caribbean 70,000 ton rates continued to slip to about W95 from last week's W100. Clean tanker rates maintained their recent plateau this week and are likely to continue at current levels, brokers said. "There is ample available tonnage awaiting employment in most areas, but without a dramatic turnabout in the number of firm inquiries this status quo will remain," broker E.A. Gibsons said in its weekly report.

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