Is The Tanker Top Near?

Oil tanker markets are again knocking at price barriers with year-highs expected to tumble as demand exceeds supply of modern ships, brokers were reporting. Shortages of high quality oil company approved vessels were causing rates to peak for Suezmaxes in the Mediterranean and West Africa and for Suezmaxes in the North Sea. July cargo demand for VLCCs in the Middle East was also seen possibly puncturing previous highs for the year. Strong demand from Western loading areas could deplete a potential 68 vessels available in the Middle East, of which just half were modern, broker E.A. Gibson said in a report. "(This) should contribute to a further upturn in rates," the broker said. Westbound VLCC rates have remained stable all week at W87.5-90 ($15.50 per ton) for the U.S. Gulf. American demand for West African oil kept VLCCs in demand there with rates at a very firm W110 ($10.00 per ton). Mediterranean Suezmax rates jumped 20 points this week to W152.5 as charterers rushed to fix ships from Ceyhan after staying out of the market while uncertainty prevailed over the extension of the Iraq oil for food deal last week. Ten points were also added to freight levels for one million barrel vessels in West Africa as rates reached a year high of W150 ($13.75 per ton). A final sign that charterers were trying to take cover from rising prices was a re-emergence of serious time chartering - with three Aframax ships reported taken by a U.S. oil company for up to three years and several Suezmaxes taken for a year or more.