Ea Gibson News

Liquefied natural gas (LNG) ships are set to receive an earnings boost from restocking demand after colder conditions drove a scramble for supplies and record high freight rates, a top LNG tanker player said.A cold snap in Europe and Asia in January and in North America last month increased heating demand, prompting prices to jump in several markets, while inventories fell."You need to replenish stocks because of the cold northern hemisphere winter in both Asia and in Europe.

Oil traders are storing as much as 80 million barrels of oil on tankers at sea, with further ships being sought as land storage sites fill up fast due to a global glut of stocks, shipping industry sources say.Traders rushed for storage after global oil demand collapsed by a third due to the coronavirus outbreak, and as top producers Saudi Arabia and Russia have refused to curb output so far, creating what is believed to be the biggest oil glut in history.The last time floating storage reached similar levels was in 2009…

Top exporter Saudi Arabia has chartered an armada of ships to flood the market with additional oil, but in the process has driven freight costs so high refiners are reluctant to take the shipments.That could leave the kingdom stuck with tens of millions of barrels in expensive ships at anchor when the coronavirus outbreak has destroyed oil demand and international prices have lost more than half their value compared with the start of the year.Following the failure to persuade…

Iran's oil tanker fleet is expected to face more hurdles before many of the vessels can start trading again due to insurance hiccups and tougher requirements over sea worthiness by potential foreign clients, despite easing of sanctions, reports Reuters. The top tanker firm NITC  was readying its return to international markets and was in talks with Western insurers while also looking to expand its fleet, says Iranian media. It's unable to secure foreign insurance or international classification services as it remains blacklisted by the United States and European Union since 2012. Classification services certify ships have met safety and environmental standards necessary to get access to most ports.

The oil price drop will hand tanker markets an unexpected bonus next year, boosting demand for oil storage at sea while distant eastern markets also bargain-hunt fuel and need shipping. Supertanker rates are already close to five-year highs of over $83,000 a day - helped by a drop in shipping fuel bunker prices. Overcapacity, which has dogged owners for years, is also receding. Herbjorn Hansson, chairman and chief executive of Nordic American Tankers, told shareholders recently that lower oil prices "may trigger stockpiling or have a more general positive impact".

Despite falling oil prices, traders in recent weeks have booked just a few tankers to store cargoes at sea as higher freight costs outweigh any profit play for now. This is partly due to expectation among tanker owners for higher rates in the final quarter of the year. That means oil traders will have to pay a premium to lease vessels for longer periods as shipping firms remain reluctant to tie up vessels given the potential for quicker earnings. "Owners will not do storage and miss out on the spot rallies to come," a tanker market source said. "There is not much incentive for owners. For the first time in several years, the price curve for Brent crude oil futures is now fully in "contango", meaning that every ICE futures month is trading below the subsequent month.

Long-range clean tanker rates stayed firm on Monday extending a recent rally with firmer cargo demand bolstering sentiment further. Long Range 1 tankers, carrying 55,000 tonne loads from the Middle East Gulf (MEG) to Japan, reached W117.50 in the Worldscale measure, or $11,453 a day when translated into average earnings, the highest since mid September last year. That compared with W116.14 or $11,156 a day on Friday and W107.45 or $8,112 a day last Monday. "With plenty of cargoes in the market and tonnage looking fairly thin far out, rates look likely to remain firm for the remainder of May," broker EA Gibson said. Larger Long Range 2 or LR2, 75,000 tonne shipments on the Middle East Gulf to Japan route were at W101.15 or $14,650 a day, the highest since mid October last year.

Iran's crude oil exports have surged to their highest in 20 months, far exceeding a 1 million barrel-per-day limit set by the West under an interim deal on curbing Tehran's nuclear program. The International Energy Agency's monthly report revised February's global crude imports from Iran upwards by 240,000 bpd to 1.65 million barrels per day, the highest since June 2012. Under an interim deal signed in November between Iran and world powers - known as the P5+1 - that came into effect in January of this year, Iran's exports are supposed to be held at an average 1 million bpd for the six months to July 20. Tough international sanctions over the past two years have cut Iran's oil exports around a half.

Clean tanker rates on the transatlantic route edged higher on Monday helped by light bookings although the market continued to struggle with a glut of vessels. Rates for medium-range (MR) tankers for 37,000 tonne cargoes on the TC2 route from Rotterdam to New York were at W124.38 in the Worldscale measure, or $8,306 a day when translated into average earnings. That compared with W122.50 or $8,048 a day on Friday and W129.17 or $9,368 last Monday. "Rates on the Europe - U.S. East Coast route declined 11.1 percent week-on-week as available capacity continued to put downside pressure on rates for cargoes out of the region," Deutsche Bank analyst Justin Yagerman said on Monday. In January, earnings reached their highest level since early August last year.

Iran's oil tanker fleet is gearing up for more business, with some vessels taking to the high seas after over more than a year at home ports, another sign that an easing in Western sanctions is enabling exports to begin to pick up. Iran and Western governments reached an interim agreement in November to restrict Tehran's disputed atomic work in exchange for limited sanctions relief for six months, which came into effect in January. U.S. and European sanctions imposed in the previous two years had sharply hit Iran's oil exports, mainly by making it difficult for buyers to arrange financing for transactions and insurance and documentation for shipments.

Tanker rates to the West firmed as charterers and operators took on board the implications of OPEC's decision to raise oil output, brokers reported. Rates of W68.5 ($11.50 per ton) for 280,000 tons to Europe and 255,000 tons to the U.S. Gulf ($11.75) were a Worldscale point or so above last done, brokers said. But the market appeared to be acting in a schizophrenic manner to the Far East where rates at best held for South Korea at W77.5 (about $7.50 per ton) and one fixture of an older vessel, the New Vitality, was reported at W74.5 ($7.00). Most brokers said the extra oil promised by OPEC should keep rates at current levels, but some said they expected some seasonal weakening to occur.

Strong demand for VLCC tankers in the Middle East failed to create a massive breakout in rates, but owners were happy as bunker fuel prices continued to fall, brokers said early last week. Expectations that a lack of modern tonnage would hike rates for mid-April oil major-approved vessels failed to come true. An Exxon cargo for Singapore lifting from three Mideast ports finally got done at the going rate of W77.5 (about $5.00 per ton) after early week offers of W100 had excited dreams W87.5 ($5.50) could be achieved. Other eastern rates held ground or crept up with the average for Japan W77.5 ($8.50 per ton) and W75 ($7.00) for South Korea. Western prices also inched up to around W65 ($11.25 per ton) for the U.S. Gulf while Red Sea fixtures achieved W72.5-75.

Middle Eastern clean product tanker rates slipped as cargoes for some ship sizes became scarce as a result of the Kuwaiti refinery outage, brokers said on Friday, but in general markets remained strong, they added. Vessels were starting to become available in prompt positions, broker E.A. Gibson said in a report, and rates for 35,000 tons to the Far East slipped to W295. Short-haul cargoes were apparently scarce as a knock-on effect from the Kuwait refinery fire last week, Gibson said. Charterers due to load from the region were forced to buy prompt cargoes to secure alternative employment for vessels, it said. But larger vessels fared better with levels maintaining W230 for 75,000 tons. U.S.

Oil tanker markets are again knocking at price barriers with year-highs expected to tumble as demand exceeds supply of modern ships, brokers were reporting. Shortages of high quality oil company approved vessels were causing rates to peak for Suezmaxes in the Mediterranean and West Africa and for Suezmaxes in the North Sea. July cargo demand for VLCCs in the Middle East was also seen possibly puncturing previous highs for the year. Strong demand from Western loading areas could deplete a potential 68 vessels available in the Middle East, of which just half were modern, broker E.A. Gibson said in a report. "(This) should contribute to a further upturn in rates," the broker said. Westbound VLCC rates have remained stable all week at W87.5-90 ($15.50 per ton) for the U.S. Gulf.

Omega Navigation Enterprises, a Greek shipowner whose shares trade in New York and Singapore, plans to buy two tankers that carry refined oil products from South Korea's STX Shipbuilding Co for US$64.5 million each. The Omega Emmanuel and the Omega Theodore, which have a capacity of 73,000 deadweight tons each, are so-called ice-class ships that are capable of navigating icy waters, the company said. The ships are due for delivery on March 23 and April 26. Omega also has options to buy two ships for delivery in the third quarter. An expected increase in shipments of refined oil products from the Middle East to Europe, Asia and the US may support demand for product tankers, EA Gibson Shipbrokers said in a recent report.

Product tanker rates improved in the UK/continent this week, but were stagnant in other lifting areas, Shipbrokers E.A. Gibson said in a weekly report, adding that movement of products within UK/Cont and out of the area had helped propel rates higher. Brokers said there might be some room for further gains next week, but nothing dramatic.

Large tanker fixing out of the key Middle East market slowed last week as charterers had largely covered their October liftings, resulting in the softening of rates by about two and a half Worldscale points, brokers said last week. VLCCs to Japan commanded between W51 and W52.5, down from the mid W50s the previous week, while Korea was slipping to W50 by the end of the week. Westbound to the U.S. Gulf maintained W47.5, and one Continent fixture reached W50. Despite the quiet conditions, Galbraith's said in its weekly report that it did not expect rates to fall much further for modern vessels. But older ships would find lengthening waiting times eroding incomes, the broker said.

Charter rates for crude tankers in the key Middle East market steadied at the beginning of last week after rising over the last few days on tightening tonnage levels. Shipbrokers said the rates, which had moved higher on the back of tightening tonnage supply coupled with a good supply of cargoes, could show further gains next week. VLCCs heading to Japan were pegged in the mid W50s with Singapore and South Korea discharges a couple of points lower. Brokers E.A. Gibson in a weekly report said there had been a reduction in the number of V/ULCCs available for charter in the lifting zone, giving optimism to owners. West African liftings continued to be dominated by million barrel vessels. Rates were assessed around the low W70s for trips to the U.S.

Shipbroker Howard Houlder (Chartering) Ltd. has sold its shareholdings in the London Tanker Broker Panel back to the other five members of the rate-setting group, panel managing director Robert Porter said. "Howard Houlder is no longer a panel member," Porter said. Porter said he did not know why Houlder had decided to leave the panel - an independent body providing tanker rate/route assessments, for which fees are charged. Houlder had been in negotiations for some time with Capital Shipbrokers Ltd. to sell its shares for approximately $1.1 million, according to other brokers and press reports. A spokesman at Capital said the company could give no comment on the breakdown of negotiations. No one was immediately available at Houlder for comment.

A resumption in Middle East oil exports to the U.S. is required to drag VLCC tanker rates off the floor, shipping brokers said. A late start to seasonal westbound oil shipments from the Middle East is making tanker brokers ask when relief will arrive. VLCC tanker rates out of the Middle East have nose-dived again in the last two weeks due to a lack of activity, to around W42 east (around $4 per ton) and west (about $7.00 per ton). Even when there has been strong tanker demand from Asia over the last month, large tanker rates have failed to take off because of the lack of oil going west, brokers said. "It is a simple formula. The Red Sea-East journey is much shorter than to the West, and allows a build up of vessels returning to the Middle East.

Mideast-Far East crude oil tanker freight rates leapt skywards for the second day in a row as the Erika-effect took hold, shipping brokers said on Jan. 21. Japan-bound VLCCs added 10 Worldscale points to W65 ($7.00 per ton) in a two-day surge from W48 ($5.25). A rush of charterers to secure modern tonnage for February cargoes was squeezing the availability of quality ships in the region. "It is the Erika factor combined with a rush to fix February cargoes that has caused this spike in rates," a broker said. Structural failure is suspected for the TotalFina-chartered 25 year old Erika breaking in two in December and spilling viscous fuel oil on French beaches. Shipbroker E.A.

Tanker markets continued strong at the end of last week with talk of new French oil company age restrictions on acceptances said likely to put further pressure on rates. Major French oil major Elf has adopted a 20 year age limit policy on terminals as well as tanker chartering, several brokers said. This was on top of the immediate imposition of last week's French government safety charter calling on oil companies only to accept ships over 15 years if they had a drydocking report in the last 30 months and had been inspected in the last six. "This will definitely move the goal posts if other European companies join in," one broker said. Up to a third of the fleet could be affected, he said. So far the impact had been greatest for Aframax and Suezmax tankers, rather than VLCCs.

Tanker rates to the West firmed as charterers and operators took on board the implications of OPEC's decision to raise oil output, brokers reported. Rates of W68.5 ($11.50 per ton) for 280,000 tons to Europe and 255,000 tons to the U.S. Gulf ($11.75) were a Worldscale point or so above last done, brokers said. But the market appeared to be acting in a schizophrenic manner to the Far East where rates at best held for South Korea at W77.5 (about $7.50 per ton) and one fixture of an older vessel, the New Vitality, was reported at W74.5 ($7.00). Most brokers said the extra oil promised by OPEC should keep rates at current levels, but some said they expected some seasonal weakening to occur.