Brokers Declare Rate Cuts In Caribbean Upcoast A

Shipping's most volatile market, the Caribbean upcoast trade, has seen rates cut in half over the last two weeks - a "bloodbath", according to Oslo broker Fearnleys.

But other brokers were quick to point out that the market had bottomed-out and started to recover on Friday. They also observed that the slump was merely a normal part of the yearly cycle as Caribbean refinery turnarounds started to bite into the supply-demand balance.

"At one point, rates for 70,000 tonners to the U.S. East Coast dropped below W140 ($1 per barrel), although... there appears to be some recovery with the last reported fixture at around W155," said London tanker broker Gibsons.

At W140, the market hit a six-month low. As the plunge started to steepen on Tuesday, a U.S. broker observed: "Every April for the last three years the Aframax (70,000 ton) market has dumped 40-50 points."

The crash ended a bull-run that started in mid-February when fog delayed lightering and loading schedules in the U.S.Gulf, forcing up rates.

Oslo brokers reported on Friday that Equiva had fixed the 70,000-ton Pedoulas at W140 ($1 per barrel), while in mid-March it had to pay more than double that ($2.2 per barrel) for a similar fixture.

Across the Atlantic, activity was scarce. But brokers were optimistic that North Sea tanker supply was thinning out and this would help rates. "Some vessels have ballasted into the Mediterranean, and this will hopefully help prevent a further weakening in rates," said Norwegian broker Lorentzen & Stemoco.