Oil Shipments Seen at Six-Month High as OPEC Output Expands

Crude-oil shipments jumped to a six-month high as Asian demand will probably lead the Organization of Petroleum Exporting Countries to expand output, according to Morgan Stanley.

Bookings of oil tankers from the Middle East, the largest loading region, rose 27 percent from last week to 79 million barrels, 55 percent above the prior four-week average, Fotis Giannakoulis, a New York-based analyst at the investment bank, said in an e-mailed report today. Asia-bound cargoes accounted for two-thirds of the charters, he said.

The hires helped rates for very large crude carriers on eastbound voyages rise 22 percent last week, reaching $10,000 a day for the first time in three months, according to Giannakoulis. Seasonal demand accounted for most of the increase, with spot bookings in the last four weeks down 14 percent compared with a year ago, he said.

“Crude chartering activity increased sharply last week to the highest level in over six months,” Giannakoulis said in the report. “OPEC production is likely on the rise, with Far East flows driving the incremental demand.”

10th Increase

Daily hire costs for VLCCs on the benchmark Saudi Arabia-to-Japan voyage rose 0.1 percent to 39.97 industry-standard Worldscale points, figures from the London-based Baltic Exchange showed today. That was the 10th gain in a row for the tankers, each able to hold 2 million barrels of oil.

Earnings for VLCCs on the route climbed 6.3 percent to $11,795 a day, according to the exchange. Its assessments don’t account for owners improving returns by securing cargoes for return-leg voyages or reducing speed to burn less fuel.

The Worldscale system is a way of 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 39.97 percent of the nominal Worldscale rate for the voyage.

The biggest one-day change for crude-oil tankers was for Aframax ships hauling 80,000 metric-ton cargoes across the Mediterranean Sea, which added 1.8 percent to 69.85 Worldscale points, exchange data show. For ships carrying refined fuels, the largest move was for 37,000-ton shipments to the U.S. East Coast from Europe, which slipped 1.1 percent to 165.42 points.

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