Oil-Tanker Costs Rise for Second Day as Owners Seek Higher RatesRob Sheridan
Costs to hire the biggest oil tankers hauling Middle East crude to Asia rose for a second session as owners sought higher rates for ships loading cargoes in the Persian Gulf.
Booking costs for very large crude carriers on the benchmark Saudi Arabia-to-Japan voyage added 0.9 percent to 31.42 industry-standard Worldscale points, the highest since April 5, figures from the London-based Baltic Exchange showed today. The ships, each able to hold 2 million barrels of crude, still lost money on the journey for an 11th session in a row.
“The sentiment feels a bit stronger, more so because owners are holding back and reluctant to commit to negative returns than any fundamental change in supply and demand,” Halvor Ellefsen, a shipbroker at Galbraith’s Ltd. in London, said by e-mail.
Increased bookings pushed the number of VLCCs hired to load this month to 119, Marex Spectron Group said today in an e-mailed report. Still, there are 85 tankers available in the gulf over the next 30 days, it said. The VLCC fleet’s total carrying capacity will rise 5.1 percent this year, above demand growth of 4.9 percent, according to Clarkson Plc, the biggest shipbroker.
Daily losses for VLCCs on the benchmark voyage as determined by the exchange narrowed to $3,409 from $4,194 on April 12. The ships lost money on the journey for seven weeks through March 14, according to its assessments, which don’t account for owners’ efforts to improve returns by securing cargoes for return voyages or reducing speed to burn less fuel.
The price of fuel, or bunkers, the industry’s main expense, fell 0.6 percent to $620.76 a metric ton today, figures compiled by Bloomberg from 25 ports 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 31.42 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 1.6 percent to 663, staying at the lowest since April 3, according to the exchange.