April 18 (Bloomberg) -- The cost of shipping Middle East oil to Asia, the world's busiest route for supertankers, may rise for a seventh day on record refueling prices and as refineries hire tankers to replenish oil stockpiles.

The Singapore price of ship fuel, or bunkers, yesterday climbed 0.4 percent to a record $533.50 a metric ton, according to data compiled by Bloomberg. Owners of very large crude carriers, or VLCCs, slowed the vessels down over the past week, a move that conserves fuel and cuts ship supply, according to AISLive data compiled by Bloomberg.

``Demand for April and the start of May has been stronger than most people expected,'' Nikos Varvaropoulos, a broker at Optima Shipbrokers in Athens, said in e-mailed note today. ``The rising price of fuel means owners have to put up prices just to maintain the same earnings.''

Fuji Oil Co. hired the tanker Taizan for up to 128 Worldscale points, according to a report today from Oslo-based shipbroker PF Bassoe AS. That's 2.5 percent above the London- based Baltic Exchange's benchmark assessment of 124.94 points for voyages to Asia.

Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.

Hire Rates

Each flat-rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.

At 124.94 Worldscale points, owners of VLCCs can earn about $88,621 a day on a 39-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg marine-fuel prices.

Frontline Ltd., the world's biggest VLCC operator, said Feb. 15 it needs $31,400 a day to break even on each of its supertankers.

Demand for ships may be rising as refineries that allowed crude oil stocks to decline now buy extra cargoes to rebuild those inventories, Varvaropoulos said.

Vessel demand is normally boosted when oil derivatives are above the physical cost of the material, a pricing structure known as contango. Such a pricing enables traders to purchase oil and offset some of the storage or transportation costs by selling it for more at a later date, using derivatives.

Pricing Structure

With the price structure being subject since last year to backwardation, meaning futures are below present prices, refineries may have delayed cargo purchases, Varvaropoulos said. Such pricing may have helped to deplete oil inventories globally, forcing traders to hire extra ships now to cover the stocks shortage, he said.

Global crude oil inventories are ``low'' globally and refineries, particularly in the western hemisphere, may seek tanker loads of crude to replenish their stockpiles, Morgan Stanley analysts Darren Gacicia, Ole Slorer and Abdiel Santiago in New York wrote in a report to clients on April 15.

To contact the reporter on this story: Alaric Nightingale in London at Anightingal1@bloomberg.net

Last Updated: April 18, 2008 07:07 EDT