Oil-Tanker Rates Gain for a Second Session After Year-End Lull

The cost of shipping Middle East oil to Asia, the tanker industry’s busiest trade route, rose for a second day as activity quickened after a seasonal year-end lull.

Charter rates for very large crude carriers on the benchmark Saudi Arabia-to-Japan voyage gained 0.6 percent to 43.08 Worldscale points, data from the London-based Baltic Exchange showed today.

Demand to hire tankers slowed at the week’s start because of the holiday period, according to an e-mailed report from London-based shipbroker E.A. Gibson. Bookings rose since then even as the supply of cargoes increased, Gibson said. Fewer ships are available until Jan. 20, said Kevin Sy, a Singapore- based freight-derivatives broker at Marex Spectron Group.

“The inquiry list is still long, so it will likely be a busy weekend,” Sy said in a report. “As usually happens after the New Year, activity ramps up with 11 more fixtures produced yesterday.”

The combined carrying capacity of the world’s VLCCs will expand 5.3 percent this year, below demand growth of 6.3 percent, according to figures in a December report from Clarkson Research Services Ltd., a unit of the largest global shipbroker. Each of the tankers can hold 2 million barrels of crude.

VLCCs’ daily earnings on the benchmark route fell 0.7 percent to $16,023, remaining at the lowest level since Dec. 14, according to the exchange. Its assessments don’t reflect speed cuts aimed at curbing use of ship fuel, or bunkers, the industry’s biggest expense.

25 Ports

The price of fuel gained 0.1 percent to $620.65 a metric ton, according to figures compiled by Bloomberg from 25 ports. That’s the highest level since Nov. 20, the data showed.

The Worldscale system is a method for pricing oil cargoes on thousands of trade routes. Each individual voyage’s flat rate, expressed in dollars a ton, is set once a year. Today’s level means hire costs on the benchmark route are 43.08 percent of the nominal Worldscale rate for that voyage.

The Baltic Dirty Tanker Index, a broader measure of oil- shipping costs that includes vessels smaller than VLCCs, fell 1.5 percent to 679, according to the exchange.

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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