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Oil Output Restraints News

31 Mar 2000

Tanker Trends

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.

24 Feb 2000

OPEC Output Increase Could Cause Tanker Shortage

Any easing of OPEC oil output restraints would be unlikely to create a shipping shortage despite charterers currently avoiding older tankers, ship brokers and analysts said. Signs that OPEC oil producers could relax their four million barrel a day output restraints in April which have lifted Brent oil prices to over $27.00 a barrel, were unlikely to cause demand to outstrip tanker supply, they said. This was despite charterers seeking to use newer vessels since the 25-year-old tanker Erika broke up off France in December causing heavy pollution. The Erika factor has caused rates to soar in some areas on a lack of prompt modern vessels, but most markets including the Key Middle Eastern VLCC sector remain over tonnaged, they said.