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Friday, October 28, 2016

VLCCs Wait For Iraqi Oil, Suezmaxes Poised For Flurry

December 17, 1999

The expected return of Iraqi oil dominated the 250,000 ton tanker market in the Middle East toward the end of the week, shipping brokers said on Dec. 10. But rates were unlikely to move drastically as there were plenty of VLCCs waiting in the Middle East to find cargoes, they said. However, Mediterranean million barrel Suezmax tankers were likely to be in strong demand once it was known when Iraqi exports could restart from the Turkish port of Ceyhan. The U.N. was expected to vote on a resolution renewing Iraq's "oil-for-food" program on Dec. 10. Four more VLCCs were fixed subject to the resumption of Iraqi exports to load at Mina al Bakr for dates from December 15-25, brokers said. The Alster Ore, Amazon Eagle, Stena Congress and Mountain Cloud joined the Jahre Pollux and Kristhild reported. All were booked to take cargoes to the U.S. Gulf with the going rate for the journey holding at around W42.5 ($7.00 per ton). In total 19 VLCCs were reported from the Middle East with reduced demand from Asia as December stems closed out. However, rates to Japan held in a range between W47.5-50 ($5.00-5.30) for 250,000 tons, with brokers saying they hoped to see the first January cargoes coming onto the market next week. But the already heated one million barrel Suezmax market was expected to come to the boil early next week as soon as dates for Ceyhan loadings became apparent. Mediterranean Suezmax rates have already pushed up to W100 ($3.50 per ton) as demand from West Africa for modern ships to the U.S. pulled tonnage out of the area. "Certain mid-December dates are very tight as charterers have sought to fix ahead of the holiday period," a broker said. Brokers expected rates to lift further on hectic demand, but found it difficult to predict how far they could go. The more optimistic among them talked of the market rocketing. Suezmax demand between West Africa and the U.S. had lifted rates by more than 30 Worldscale points in about 10 days, to W107.5 ($9.40 per ton), and two transatlantic fixtures were reported in the mid W90s ($6.70). Strong demand for Aframax 80,000 ton vessels in the Mediterranean had also spiked rates by about 10 points over the week to W97.5-100 (up to $3.50), reducing the likelihood that charterers could seek lower prices by splitting cargoes, brokers said. In the North sea, the end of month pre-Christmas rush was also strongly pushing rates. UK-Continent Aframax voyages were reported from W115 ($4.25 per ton) to W125 ($4.60). "There is a lot of demand and not many ships. It is getting hard to find ships before December 25," a broker said. - (Reuters)

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