Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Middle East Supertanker Surplus Seen Unchanged by Brokers

Nov. 6 (Bloomberg) -- A glut of the largest oil tankers in the Persian Gulf was poised to remain unchanged for a second week, a Bloomberg News survey showed.

There are 17.5 percent more very large crude carriers for hire over the next 30 days than there are likely cargoes, the median estimate in a survey of six shipbrokers and owners today showed. That’s the same as on Oct. 30 and Oct. 23, according to previous surveys.

VLCCs on the Saudi Arabia-to-Japan voyage, the benchmark route for supertankers sailing to Asia, are returning to West African ports to collect cargoes, curbing the supply of ships in the Middle East, according to Odysseas Valatsas, chartering manager for Dynacom Tankers Management Ltd. report. Still, the global VLCC fleet will expand 6.8 percent this year, compared with demand growth of 4.8 percent, according to Clarkson Research Services Ltd.

“It seems like the amount of November cargoes will be higher than the last few months,” Valatsas said by e-mail today. “There is hope for a much better market.”

VLCCs are losing $724 daily, figures from the Baltic Exchange in London showed. That compares with a loss of $1,799 yesterday, the data showed. Returns were positive in only four sessions so far in the second half. Each vessel can hold 2 million barrels of oil.

Speed Cuts

The exchange’s assessments don’t reflect speed cuts aimed at reducing fuel costs, the main expense for owners, who can boost returns by slowing tankers on return journeys after unloading cargoes. The price of fuel, or bunkers, lost 0.6 percent, sliding to $611.30 a metric ton, the lowest level since July 25, data compiled by Bloomberg from 25 ports showed today.

Hire costs for very large crude carriers on the benchmark Saudi Arabia-to-Japan voyage slipped 0.4 percent to 35.77 industry-standard Worldscale points, exchange 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 35.77 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, slid 0.6 percent to 655. That’s the lowest since Oct. 1, the data showed.

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.