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Mideast Tanker Glut Seen Rising From Six-Week Low in Survey

Jan. 15 (Bloomberg) -- The surplus of the largest oil tankers available for loading in the Middle East rebounded from a six-week low, according to a Bloomberg News survey.

There are 19.5 percent more very large crude carriers for hire over the next 30 days than there are cargoes, the median estimate of six shipbrokers and owners showed today. That was up from 15 percent on Jan. 8, when the excess was the smallest since Nov. 27, according to prior figures. No surveys were conducted for the weeks of Dec. 25 and Jan. 1.

Daily earnings for the vessels on the benchmark voyage to Asia from the Middle East fell 21 percent since the start of the year to $13,060 today, according to the Baltic Exchange, the London-based publisher of shipping costs. Each VLCC can hold about 2 million barrels of crude.

The exchange’s assessments don’t reflect owners cutting speed to save fuel, their biggest expense. The cost of ship fuel, known as bunkers, was little changed at $625.52 a metric ton today, data compiled by Bloomberg from 25 ports showed. Last year’s average of $658.54 was more than double the price for 2008, according to the figures.

Charter costs for VLCCs on the benchmark route slipped 0.3 percent to 42.05 industry-standard Worldscale points, staying at the lowest level since Nov. 12, 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 42.05 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, declined four points to 633, according to the exchange today.

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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