Persian Gulf Tankers May Extend Decline as Rental Demand Slows
The cost of shipping Middle East crude to Asia, which ended a week-long rally yesterday, may decline further as bookings slow, eclipsing demand for ships to be used as storage.
No double-hulled very large crude carriers were booked to ship consignments from Persian Gulf ports to Asia, according to reports yesterday and today from Athens-based Optima Shipbrokers. Rents advanced 51 percent last week, buoyed by demand from oil companies to hire the carriers as storage.
“I don’t think the storage has been enough to really make an impact,” Halvor Ellefsen, a tanker broker at SeaLeague AS in Oslo, said in an e-mailed note today. The supply of ships to collect cargoes at the end of December is “far from tight.”
Japan’s economy contracted 1.8 percent in the third quarter and exports from China shrank last month as a global recession deepened, sapping demand for oil. The Baltic Exchange’s benchmark rate, for Saudi Arabian cargoes to Japan, fell 1.7 percent to 91.73 Worldscale points yesterday.
Worldscale points are a percentage of a nominal rate, or flat 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.
Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
A rate of 91.73 points works out at $69,983 a day, according to the Baltic Exchange. Globally the carriers are making $59,466 a day. Frontline Ltd., the largest owner of the vessels, said today it needs $34,700 a day to break even on each of its supertankers, a 10 percent increase compared with August.
Source:
http://www.bloomberg.com
Tags: baltic, persia, persian gulf, shipping Middle East, tankers
This entry was posted on Wednesday, December 10th, 2008 at 1:12 pm and is filed under Cargo & Shipping News. You can follow any responses to this entry through the RSS 2.0 feed.