Tanker Contracts May Be Overpriced, Imarex’s Sy Says

Freight derivatives used by traders to speculate on, or hedge, the cost of shipping oil may be overpriced for the first half of next year, taking into account the number of ships being built, a broker of the accords at Imarex Asia Pte said.

Forward freight agreements for very large crude carriers, or VLCCs, indicate rental income from the benchmark Saudi Arabia-to-Japan route of about $22,000 a day for the first half of next year, double the returns available from the spot market today, Kevin Sy, a broker at Imarex Asia, said by e-mail today.