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Persian Gulf Tanker Glut Shrinks as U.S. Seen Seeking More Crude

The glut of supertankers competing for 2 million-barrel cargoes of Persian Gulf oil declined amid speculation charters to the U.S. are rising.

There are 20 percent more very large crude carriers available in the Persian Gulf over the next 30 days than there are probable cargoes, according to the median estimate of seven shipbrokers and owners in a Bloomberg News survey today. That’s five percentage points fewer than last week and the smallest excess since Feb. 26.

Bookings for Persian Gulf oil to the U.S. rose to 31 million barrels last week, the highest level since May, Fotis Giannakoulis, a New York-based analyst at Morgan Stanley, said in an e-mailed report yesterday. The charters are more than twice the weekly average this year, he said.

“There seems to be more westbound interest drawing crude cargoes to the U.S. Gulf,” Halvor Ellefsen, a shipbroker at Galbraith’s Ltd. in London, said by e-mail. “Refineries in the region are returning from maintenance.”

The number of vessels booked in the Persian Gulf to haul crude in February dropped to 103 from 123 in January, according to data from Marex Spectron Group, a London-based commodities brokerage. Last month’s tally was the smallest since November 2010, Marex Spectron data show.

The combined carrying capacity of the world VLCC fleet will expand 5.1 percent this year, just less than demand growth of 5.2 percent, according to data from Clarkson Plc (CKN), the world’s biggest shipbroker.

Daily earnings for the supertankers plunged 75 percent to $11,656 in the past 12 months, according to Clarkson. They were $7,518 in the week ended Feb. 15, the lowest since September 2011. Frontline Ltd., the VLCC operator led by billionaire John Fredriksen, said Feb. 22 it needs daily returns of $24,200 to break even.

VLCCs plying the industry’s benchmark Saudi Arabia-to-Japan trade route are losing $1,530 a day, according to the Baltic Exchange in London yesterday. Daily losses averaged $5,072 in February, the worst market since August. The measure doesn’t account for the fact vessels can cut speed and lower fuel costs.

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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