More cargoes of Middle East crude are moving to the U.S. as refineries in the Gulf of Mexico return from routine maintenance, adding demand for oil tankers, according to Morgan Stanley.
Bookings for tankers to carry one-time cargoes to the U.S. rose to 31 million barrels last week, the highest level since May and more than twice the weekly average this year, Fotis Giannakoulis, a New York-based analyst at the investment bank, said in an e-mailed report today. The average number of cargoes in the past three weeks was 30 percent higher than during the preceding six, he said.
“While the previous increases were primarily driven by stronger Asian demand, last week we saw a jump in the number of spot cargoes scheduled to sail toward the U.S.,” Giannakoulis said in the report. “With U.S. crude demand moving higher as Gulf of Mexico refineries return from maintenance, the Middle East is likely to become the marginal supplier, adding long-haul voyages.”
Rates for very large crude carriers hauling 2 million barrels on their busiest trade route rose 1.8 percent to 33.44 industry-standard Worldscale points today, according to the Baltic Exchange, the London-based publisher of shipping costs. Daily losses on the benchmark voyage to Japan from Saudi Arabia narrowed to $1,530, according to the exchange.
That assessment doesn’t account for owners cutting speed to save on fuel, their biggest expense. The price of ship fuel, known as bunkers, fell less than 0.1 percent to $631.34 a metric ton today, according to data compiled by Bloomberg.
Worldscale points are a percentage of a nominal rate for more than 320,000 specific routes. Flat rates for every 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.
The Baltic Dirty Tanker Index, a wider measure of oil-shipping costs that includes smaller tankers, fell 1.2 percent to 666, the lowest since Feb. 19, according to the exchange.