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Oil-Tanker Glut Seen Swelling in Persian Gulf as Rates End Rally

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Aug. 14 (Bloomberg) -- A surplus of oil tankers seeking cargoes in the Persian Gulf expanded, curbing an advance in charter rates for the vessels.

There are 20 percent more very large crude carriers for hire over the next 30 days than there are cargoes, according to the median estimate of seven shipbrokers and owners surveyed by Bloomberg News today. A week ago, the excess was 16.5 percent.

The cost of chartering the ships fell to 36.58 Worldscale points yesterday, snapping six days of gains, according to data from the Baltic Exchange in London. The ships are losing $4,648 daily, according to the bourse, whose calculations don’t take account of speed alterations that can boost the vessels’ earnings by lowering their fuel consumption.

Owners are contending with vessel supply that’s expanding faster than trade. The transportation capacity of the global VLCC fleet will swell 6.9 percent to 188 million deadweight tons, according to Clarkson Plc, the world’s largest shipbroker. Demand for the vessels will grow 4.7 percent, it anticipates.

Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for very 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.

To contact the reporter on this story: Alaric Nightingale in London at anightingal1@bloomberg.net

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

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