W45 News

Rates fall back after climbing earlier in the week. Overcapacity, OPEC cuts, little scrapping, summer lull weigh on market. Owners of modern very large crude carriers (VLCCs) could see a gain in charter rates amid tightening vessel supply but freight rates, especially for older and newly delivered ships, will remain under pressure, brokers said on Friday. That came as rates rebounded slightly earlier this week on routes from the Middle East only for them to fall back to last week's levels by Friday. Rates hit around 53 on the Worldscale measure after Unipec fixed four VLCCs at around W51-52. "We did see a slight upward correction but rates have fallen off again," said a Singapore-based supertanker broker. That came after S-Oil and Thai Oil fixed VLCCs at W43 and W44.50 on Thursday.

40 MidEast VLCC cargoes fixed for early April loading. Freight rates for very large crude carriers (VLCCs), which have fallen to six-month lows, are likely to hold steady around current levels as owners resist charterers' attempts to push rates lower, brokers said. "Rates are stabilising now - owners are resisting further falls. But I don't see the market going up," a European tanker supertanker broker said on Friday. "There's been a consensus of sentiment rather than any real improvement in the market. There are still a lot of ships available for charter," the broker said. Charter rates from the Middle East to Asia are around $15,000-$20,000 per day, according to the route and specification of the ship, the broker said.

"Pure" chartering market with little disruption. Rates to hold around W45 for Middle East; W48 for West Africa. Freight rates for very large crude carriers (VLCCs) are likely to hold steady around existing levels as new vessel deliveries and a reduction in port delays weigh on a ample cargo market, ship brokers said. "The market will not be majorly different next week. VLCC rates have been limping along," a Singapore-based supertanker broker said on Friday. New tanker deliveries, vessels returning to service from repair yards, minimal scrapping of older ships and little port congestion have all contributed to swell the number of ships available for charter, brokers said. "It's a pure market from the point there is virtually no disruption," the Singapore broker said.

Around 47 MidEast charters fixed for July loading so far; older tonnage and new vessels a drag on freight rates. Freight rates for very large crude carriers (VLCCs) are set to nudge higher next week after moving above nine-month lows on increased charters this week, ship brokers said on Friday, although gains will be capped by ample tanker availability. "The market is still rubbish, but it has turned," a Singapore-based supertanker broker said on Friday. "There is plenty of fixing to come in the rest of the month, but there are still plenty of ships available," the broker said. Around 47 VLCC charters have been concluded to load Middle East crude in the first 20 days of July compared with a monthly average this year of about 120-135, the broker said. "I doubt we see rates climb very high.

Port congestion eases at Basra and Chinese ports; tanker demand set to expand on lower oil prices. Freight rates for very large crude carriers (VLCCs), hurt by slower-than-usual release of cargo, could slip further next week as more tonnage becomes available with the easing of recent tanker traffic jams in China, ship brokers said on Friday. Charter rates from the Middle East to Japan slipped to a six-month low on Thursday, falling by 12 Worldscale points or almost $14,000 since April 21. There are talks of a VLCC from Basra to Asia being fixed for a rate of W45, a Singapore-based supertanker broker said. This could not be confirmed, but if true, the rate would be the lowest since Sept. 2, according to data on the Thomson Reuters Eikon terminal.

Rising oil exports from Libya after months of disruption helped push Mediterranean tanker rates to the highest levels in nearly six months on Wednesday, and shipping players expected more gains in earnings as shipments from the OPEC member step up. Aframax tankers on the Mediterranean route, which transport the majority of Libya's crude oil, normally carry loads of up to 600,000-700,000 barrels. Rates have been depressed in recent months due in part to slower exports from Libya. Cross Mediterranean rates for aframax tankers rose on Wednesday to W126.70 in the worldscale measure of freight rates, or $32,080 a day when translated into average earnings, their highest level since late January, Baltic Exchange data showed.

Increased secrecy in the tanker chartering market may be pushing rates lower, even though many brokers and owners like the idea of doing private business. Although it has always been a secretive business where only a portion of trading was made public, shipping sources say more and more tanker chartering is being done directly through a single broker rather than being put out to tender. However, ship owners and some brokers say charterers are able to dictate rates because they have more information about cargo and ship availability and can influence the perception of supply and demand. Despite this, most tanker brokers generally prefer private business even if it means they cannot compete for some cargoes.

A continued slide in Middle East tanker rates to near year lows was expected to end this week by the emergence of Saudi stems and a resumption of Iraqi exports, shipping brokers said. VLCC tanker operators' earnings hit their lowest levels yet this year as a result of a combination of heavily depressed Middle East tanker rates and fixtures plus high bunker prices, brokers said. With only eight VLCCs fixed from the Middle East last week, rates to Japan fell to W45 ($4.80 per ton) from around W50 ($5.30) the week before and to about W42.5 ($2.75) for Singapore. Rates to the U.S. Gulf fared no better, dropping a two and a half points to around W42.5 ($7.00 per ton).

Tanker markets soared into orbit this week for August loading dates, but remained dull and depressed for September loading, brokers said. London tanker brokers said late on Thursday that they were negotiating North Sea Aframax deals (70-80,000 tons) for August loading at W200, representing a rise of over 80 percent in the space of 48 hours. But September cargoes were fixed at a much more sedate W110. Shell paid W175 for a Statoil owned ship heading to the northern Europe, and brokers said on Friday that W180 ($0.96 per barrel) had also been done. There was no evidence of anything firm at W200. "It is reasonable to anticipate that further gains could be achieved for end month liftings," said London broker Gibsons.

Mideast-Asia VLCC and Mediterranean Suezmax crude tanker rates have risen due to increased activity and a lack of vessels, shipping brokers said Sept. 29. VLCC rates to Japan from the Middle East lifted to W52.5 and were heading for W55, from around W47.5 last week, brokers said as cargoes finally came on the market. Other destinations were also lifted with brokers saying W50-52.5 might be reached for Singapore and China and W52.5 for Korea for modern vessels. "There is a lot of activity going East and not many decent vessels around, so we definitely see rates going up from now," one broker said. Bangchak, CPC, Nippon Oil and Cosmo were among charterers seeking vessels for Asian fixing between October 22-27, brokers said.

Depressed tanker markets will be hit hard by Iraq's decision to suspend crude oil exports for up to two weeks, tanker brokers said. Suezmax tanker rates in the Mediterranean are expected to be worst affected due to the cessation of Iraqi crude loadings at Ceyhan, and any hoped-for recovery for Middle Eastern VLCCs will be delayed. "It will particularly hit Suezmaxes in the Mediterranean because Russian exports have also been cut back," one broker said. Iraq has been exporting nearly a million barrels of Kirkuk oil a day - equivalent to one Suezmax vessel - from the Turkish port of Ceyhan. "There will certainly be no sign of any recovery for VLCC rates," another broker said.

North Sea oil tanker rates surged spectacularly again on Dec. 13 on a shortage of vessels available before Christmas, shipping brokers said. Aframax 80,000 ton vessel rates shot up a further 25 Worldscale points to W150 ($5.50 per ton) from a highest seen of W125 ($4.25) on Friday, they said. "The North Sea has gone bananas. It is very tight on tonnage for modern ships up until loading dates of around December 27," a broker said. However, he said the second half of the week could go flat again as charterers completed fixing their December cargoes. Rates were also firming in the Mediterranean as pressure was exerted from the North Sea with cross journey rates of W105-110 ($3.60-3.75) the norm, brokers said.

Crude oil tanker rates maintained recent strength as markets continued active ahead of the Christmas break, shipping brokers said on Dec. 23. "Aframax and Suezmax markets are still bouyant; only VLCCs are still struggling along," one broker said. Tankers were fixed ahead of the holidays next week which would leave just Wednesday and Thursday for London brokers to trade. Not much activity was expected then. Continued shortage of tonnage for prompt dates were holding UK-Continent Aframax rates in the region of W150-160 ($5.50-5.85 per ton), slipping from a high of W165 achieved early this week. Cross Mediterranean voyages for the 80,000 ton vessels could achieve up to W122.5 ($4.20 per ton) while rates from the Mideast to Far East were about W130 ($13.75). Caribbean - upcoast U.S.