Oil-Tanker Rates Fall Most in Six Weeks as Demand Seen Stalling

Rates for the largest oil tankers on the benchmark trade route fell the most in six weeks on concern demand from refiners returning from maintenance stalled.

Charter costs for very large crude carriers hauling 2 million barrels of Middle East oil to Asia fell 3.1 percent to 38.41 industry-standard Worldscale points, according to the Baltic Exchange, the London-based publisher of freight rates. That was the biggest decline since April 2, data show.

Rates rallied in the past two weeks as long-distance voyages to the U.S. from the Middle East and to Asia from West Africa relieved a glut of vessels, Frode Moerkedal, an Oslo-based analyst at RS Platou Markets AS, said in an e-mailed report today. While refineries resumed buying the market after routine maintenance, bookings stalled this week, he said.

“The pickup in activity still hasn’t materialized,” said Kevin Sy, a Singapore-based freight-derivatives broker at Marex Spectron Pte. “Rates just stayed where they have been for the last few days.”

Daily earnings for the voyage fell for the first time in nine sessions, dropping 14 percent to $10,763, according to the exchange. Those assessments don’t reflect owners cutting speeds to save on fuel, their biggest expense. The price of ship fuel, known as bunkers, rose 1.3 percent to $612.58 a metric ton, according to data compiled by Bloomberg from 25 ports worldwide.

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

The Baltic Dirty Tanker Index, a wider measure of oil-shipping costs that includes smaller vessels, fell 0.5 percent to 611. The biggest move in the dirty tanker market was on the Saudi Arabia-to-Japan route. The biggest change in the market for ships hauling refined fuels was for gasoline tankers to the U.S. East Coast from Europe, down 6.3 percent to 143.54 points.

To contact the reporter on this story: Isaac Arnsdorf in London at iarnsdorf@bloomberg.net

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

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