Persian Gulf Oil-Tanker Rates Decline Amid Demand Speculation
Charter rates for the largest oil tankers on the industry’s benchmark trade route declined for a second session amid speculation that demand to ship crude cargoes declined.
Hire costs for very large crude carriers on the Saudi Arabia-to-Japan voyage slipped 2 percent to 35.92 Worldscale points, data from the London-based Baltic Exchange showed today. Earnings fell about 4 percent to $19,000 a day for the supertankers hauling 2 million barrels of Middle East oil to Asia, according to Cowen Securities LLC, a New York-based investment bank.
“Demand for eastern cargoes began to taper off later last week,” Sam Margolin, an analyst at Cowen, said in an e-mailed report today.
Rates gained earlier this month because of a “near term” shortage of vessels, Arctic Securities ASA, an Oslo-based investment bank, said in an e-mailed report today. The VLCC fleet’s capacity will expand 5.1 percent this year, in line with demand growth of 5.2 percent, according to data from Clarkson Plc (CKN), the world’s biggest shipbroker.
The price of fuel, or bunkers, the industry’s biggest expense, slipped 0.2 percent to $622.82 a metric ton, figures compiled by Bloomberg from 25 ports showed today. That’s a fifth straight decline, the data showed.
The Worldscale system is a method for pricing freight costs for 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 35.92 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 0.3 percent to 675, the first loss in four sessions, according to the exchange.
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