W50 News

The cost of chartering a supertanker to load Middle Eastern crude oil for Asia has rebounded from a 19-month low in September, but industry sources expect output supply cuts, led by Saudi Arabia, to cap freight rates for the rest of the year.The world's benchmark very large crude carrier (VLCC) export route from the Middle East Gulf (MEG) to Japan, known as TD3, rose to W50.46 on Monday in the Worldscale measure of freight rates, LSEG data showed. It fell to W35.60 in September…

Around 90 ships charter free for early September loading. Freight rates for very large crude carriers (VLCCs) on Asian routes will remain under pressure for at least the next month, facing strong headwinds from a glut of tonnage, brokers said. "There are around 80 to 90 ships available for charter in the first 10 days in September - that's about three ships for every cargo," a Singapore-based supertanker broker said on Friday. "There are about six or seven VLCCs free for charter now, but the earliest they'll see any cargo is early September," he said. That came as owners were attempting to resist moves by Chinese oil trading house Unipec to push rates lower on its latest charter.

About 20 MidEast VLCC still to be fixed for August. Freight rates for very large crude carriers (VLCCs) on Asian routes may have finally bottomed as owners attempt to resist moves by charterers to push rates still lower, brokers said. "This is a really bad market now. The floor keeps getting lower but I think there's now resistance by owners," said a Singapore-based supertanker broker on Friday. That came as VLCC rates from the Middle East averaged around 42 on the Worldscale measure this week, a new low for this year and lower in equivalent earnings than 2016. "VLCC owners now only have one quarter left to make it up but even if average global VLCC rates go up to $30…

Rate correction likely after low S-Oil charter drags market. Freight rates for very large crude carriers (VLCCs) could see a small respite next week, building on the slight improvement seen in the last two days although sentiment is likely to remain pessimistic of any real recovery, brokers said on Friday. "There was a large drop on Tuesday when South Korea's S-Oil fixed at 45.50 (on the Worldscale measure). But rates are now correcting," a Singapore-based supertanker broker said. Hong Kong tanker owner Associated Maritime is thought to have fixed 10 VLCCs to Unipec for contracts of affreigtment in the middle of August. "That might signal Unipec doesn't have any vessels and it expects rates to rise," the broker added. "I feel we're not too far off the bottom.

MidEast-Asia rates likely to remain flat until August; paper derivative trades show no uptick until October. Freight rates for very large crude carriers (VLCCs) are likely to remain flat next week, a situation that could well last until August, brokers said on Friday. "Rates are stuck. I don't see there being any hope for July cargoes. Similar rate levels are probably here for August cargoes," a Singapore-based supertanker broker said on Friday. Current pricing of VLCC derivative futures for the Middle East-Japan route stood at 52.50 on the Worldscale measure for July. That falls to W49.75 for August, W49.50 for September and W54.50 in October. "That indicates much of the same rates story we've got now," the broker said. "There's been bits and bobs of chartering activity this week.

VLCC's likely to struggle to break even for next two months; three-tier VLCC market weighs on sentiment. Freight rates for very large crude carriers (VLCCs) are likely to become steady around the current levels as owners resist charterers' attempts to pull down hire rates with the emergence of a three-tier market, brokers said on Friday. That came as brokers said South Korean charterers GS Caltex/S-Oil failed to charter a VLCC at below 40 points on the Worldscale measure for a voyage from the Middle East to Korea as owners balk at hiring out their ships at a price equivalent to operating costs. That is equivalent to earnings of around $8,000 per day compared with daily operating costs of $7,500 for a 300,000 deadweight tonne VLCC.

Power struggle breaks out between between owners and charterers; West Africa cargoes hit a monthly record. Freight rates for very large crude carriers (VLCCs), which surged to a four-month high on Thursday, to hold steady as ship owners await the release of November cargoes, ship brokers said on Friday. "There's a power struggle going on between owners and charterers," said a European supertanker broker on Friday. "Few charters were done on Thursday. There are no fresh cargoes out of the Middle East Gulf," the broker added. That came as rates surged 10 points on the Worldscale measure in one day, equivalent to a more than $10,000 increase in daily earnings, the broker said.

VLCC earnings double in a week. End of force majeure in Nigeria buoys cargo volumes. Freight rates for very large crude carriers (VLCCs) are set to rise further next week, fuelled by a raft of cargoes from West Africa and the Middle East amid tight tonnage supply, ship brokers said on Friday. VLCC freight rates hit a multi-month high on Thursday. "The optimism among owners is punchy - I think the market has legs on it and could easily increase by another 10 points (on the Worldscale measure)," a European supertanker broker said on Friday. That would be a rise of around $10,000 per day in earnings for a VLCC from the Middle East to Asia, freight rate data on the Reuters Eikon terminal showed. "Rates have come from $10,000 per day and owners have been able to whack it up to $20,000 day.

MidEast VLCC rates jump by almost $13,000 a day; Basra cargos could increase daily rates by $9,000. Freight rates on Asian routes for very large crude carriers (VLCCs) are set to climb higher next week as unloading delays and weather-related port congestion in China tighten vessel supply on strong chartering activity, brokers said on Thursday. "The market is pretty hot. I don't think rates will climb into the sky, but there is a little bit more upside," a Singapore VLCC broker said on Thursday. That came as charter rates from the Middle East to China climbed by 14 Worldscale points in the week to March 9, Thomson Reuters chartering data showed. That is a jump in daily earnings of around $12,670. "Basra cargoes normally come out on the 12th of the month.

Owners resist charterers moves to force rates under W50; West Africa cargo volumes remain steady. Rates for very large crude carriers (VLCCs) on key Asian routes will face further pressure next week even as owners resist attempts to push rates lower, brokers said. Ship owners were showing a united front to keep rates above 50 on the Worldscale measure from the Middle East to Asia, a Singapore-based VLCC broker said on Friday. "Nobody is doing anything below W50. Owners are keeping numbers up," the broker said. Oil majors including Chevron, Shell and BP had all chartered VLCCs at freight rates above W50 this week, Reuters freight data showed. But the broker questioned how long ship owners could stop rates falling as the amount of available tonnage is increasing.

Charterers to release 30 Middle East VLCC cargoes next week. VLCC market buoyed by upbeat Suezmax, Aframax sectors. Rates for very large crude carriers (VLCCs) on key Asian routes are set to continue the rebound that started on Wednesday with a raft of new cargo requirements and upbeat sentiment, brokers said. Brokers anticipated charterers would ramp up the number of VLCC cargoes from the Middle East to be loaded in the first 10 days of December. "There will be the best part of 30 cargoes to fix next week which is going to change everything," said a Singapore-based VLCC broker on Friday. "The market will certainly be firm if it doesn't run away with itself," the broker said. Charterers have drip-fed cargoes over the last three weeks, pushing rates lower.

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WEG, a global supplier of drive systems, will showcase its range of systems for the shipbuilding and offshore industry at this year’s SMM (Shipbuilding, Machinery & Marine Technology Fair) in Hamburg. From September 9-12, visitors to Stand 303 in Hall B6 can learn more about WEG’s standard and special drive systems designed for ships and other on-board support tasks. The product portfolio ranges from low and high voltage motors to generators, frequency inverters and low voltage switching equipment.

Crude oil tanker earnings on the major Middle East route fell on Tuesday as a build up of vessels available for hire weighed on rate sentiment. Shipping markets continued to monitor developments in Ukraine after Russia sent military forces into the Crimea region of southern Ukraine. Russian President Vladimir Putin said Moscow would only use military force in Ukraine as a last resort. A U.S. official said it was ready to impose economic sanctions on Russia. The world's benchmark VLCC export route from the Middle East Gulf (MEG) to Japan reached W50.73 in the Worldscale measure of freight rates, or $25,765 a day when translated into average earnings. That compared with W51.33 or $27,219 a day on Monday and W55.05 or $32,176 a day last Tuesday.

A huge oversupply of VLCCs for trades from the Mideast Gulf to Asia has led to the most serious market decline in over two years, pushing rates to 13-month lows, brokers said. "The amount of ships compared to cargoes is phenomenal," said a Singapore broker. He said rates lost 10 worldscale points ($0.17 per barrel) on Thursday, to reach W58 ($0.98 per barrel) for 250,000 ton cargoes to Japan, and that tanker owners had simply stopped negotiating in their rush to find cargoes. "I think it'll go down further. We'll see at least W50 before it goes back up," he added. Brokers pointed to a fixture to Taiwan's China Petroleum Co (CPC) for a 250,000 ton cargo, as the source of tanker owners' trouble. "The owner took the first counter (bid) from CPC. There was no negotiation at all," said one.

Charter rates for product tankers continued to be depressed as surplus tonnage kept a lid on rises last week despite an increase in business in several loading areas. The Middle East saw levels fall. Tankers carrying 25,000 tons into India were seen taking W165, the same for 30,000 tons to Japan. Larger ships carrying 75,000 tons to Japan were attracting around W120. Shipping brokerage E.A. Gibsons said there was sufficient prompt tonnage of LR 2s to indicate that rate may decline further. Increased chartering in the Mediterranean did not propel rates higher. Shippers said it was an all-too familiar problem of too many ships chasing too few cargoes. Rates for 30,000 tons of gas oil hovered around W110-120 with naphtha cargoes of 27,500 were able to secure carriage around W150.

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).

Freight rates for Korea-bound VLCCs out of the Middle East joined those for Japan in hitting W50 by Sept. 3, brokers said. At least one fixture of W50 was reported for Korea, up from around W47.5 earlier in the week as the Middle East VLCC market strengthened. Some 70 vessels of around 21 million tons were potentially available in the area in the next month, but a shortage of modern tonnage for September liftings suggested rates could strengthen further. "Owners will look to make further improvements," broker Gibson said in its weekly report. Other brokers said owners were holding out for higher rates are after being hurt by recent high bunker prices, and VLCC rates westbound were also strengthening. VLCC fixing to the U.S.

Rates for VLCCs collapsed by 15 percent overnight as shipowners scrambled to book voyages out of the Mideast Gulf before September 1 when OPEC cuts are expected to hit tanker demand. Exxonmobil fixed the Starlight Jewel for a 275,000-ton cargo to Singapore loading July 24 at W43.5 (about $0.42 per barrel), brokers said, compared to estimates of the route at W50 on Wednesday. They said W42.5 could be done by the end of Thursday, representing a drop of nearly nine cents per barrel in the space of 24 hours. "There were about nine shipowners falling over each other to get that fixture, and for Exxon it was like taking candy from a baby," said one London broker. "It's been a quiet week and people are just very scared of September, a lot comes down to sentiment," he added.

Tanker markets around the world soared this week, led by the North Sea market where rates swelled by nearly a third as supply dried up for end-month loading dates. Brokers said Vitol paid W160 ($0.85 per barrel) for the 80,000 tonner Moscow River loading from Teeside on July 26, compared to W125 at the start of the week and W95 a month ago. "There's been pressure for the end of month positions, which we'd kind of anticipated," said a London broker. Most of the smaller tankers were heading to northern Europe, but the larger sizes started to see some transatlantic activity this week. A raft of transatlantic fixtures pushed million-barrel rates past the W110 mark ($1.13 per barrel) and VLCC rates to W55 for U.S.Gulf discharge.

Friday's dirty tanker fixture lists revealed the full extent of this week's blood-bath on VLCC trades from the Mideast Gulf. Rates collapsed by 15 percent overnight on Wednesday as shipowners scrambled to book voyages out of the Gulf before September 1 when OPEC cuts are expected to hit tanker demand, brokers said. Exxon mobil fixed the Starlight Jewel for a 275,000 ton cargo to Singapore loading July 24 at W43.5 (about $0.42 per barrel), brokers said, compared to estimates of the route at W50 on Wednesday afternoon. Friday fixture lists showed a further two bargain-basement fixtures: Taurus booked the Napa for a 270,000 ton westbound September cargo from Al Bakr at W40.5 ($1.15 per barrel).

Large tanker rates slid back slightly off recent highs this week as Middle East September stems drifted to their conclusion, brokers said. VLCC rates for Japan, which peaked at W52.5 at the end of last week, slid back to around W50 while western rates fell back to about W47.5 from a peak of W50. Late week VLCC fixtures included two Bayoil charters for Bergesen vessels to the U.S. Gulf from Al Bakr at a soft W47-47.5 for well ahead October 10 and 20 sailings. Some brokers said expected October stems next week would mean a busier time with rates picking up, but Galbraiths noted that the Bayoil and two Chevron October charters at the same rates and similar October dates showed market weakness.

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.