Crude Oil and Product Tanker Voyage Freight Rates
Charts from June 2007 IEA Oil Market Report
Thursday, June 28, 2007
Asian Aframax Rate Drops First Time in 6 Days
Asian Aframax Tanker Shipping Rate Drops First Time in Six Days
By Katherine Espina
June 27 (Bloomberg)
The cost of shipping 80,000 metric tons of oil on Asian routes dropped the first time in six days as most bookings for early July have been concluded. Further declines may be limited as freights for the rest of the month are fixed.
The rate of shipping crude or fuel oil on so-called Aframax tankers to Singapore from Kuwait dropped 0.13 percent to Worldscale 154.42 yesterday, according to the London-based Baltic Exchange. Last week, it rose the most since March 30.
Asian freight rates for shipping oil on Aframax tankers increased 6 percent last week as charterers hired vessels to load fuel, brokers including London-based Galbraith's Ltd. said. Some owners of Aframax vessels expect rates to rise after vessel requirements for early next month have been fixed, Kats Nishikawa at shipbroker Matsui & Co. in Tokyo said.
``A number of fixtures have been concluded throughout the week and there are still plenty lined up,'' said Galbraith's in its report for the week ended June 22. ``This firmer trend looks set to continue next week.''
This week, four Aframax tankers are expected to arrive in Singapore and three more in the first week of July, according to AISLive on Bloomberg.
The Baltic Dirty Tanker Index, which tracks 12 routes, has fallen 21 percent this year. It fell 1.1 percent to 1041 yesterday, the second day the measure fell. The cost of shipping a barrel of oil on an Aframax vessel on the Kuwait-to-Singapore route stood at $2.01 yesterday, unchanged for a second day, according to Bloomberg data.
Indonesia, Japan Route
The Aframax tanker rate on the Indonesia-to-Japan route was steady at Worldscale 157.50 on June 22, the daily cost for the past 17 days, according to Bloomberg data. Shipping a barrel of oil on the route amounts to $1.84, little changed in the past three weeks, according to Bloomberg data.
The costs of shipping gasoline and other so-called clean petroleum products to Asia were mostly lower yesterday, according to the Baltic Exchange.
Shipping rate for 55,000 tons of products on the route to Japan from the Middle East dropped 0.9 percent to a four-month low of Worldscale 155.77, based on data from the Baltic Exchange. The rate has fallen 22 percent in the past 21 days.
The cost of carrying 75,000 tons of gasoline, naphtha or jet fuel from Singapore to Japan declined for a 12th day. The rate dropped 3.2 percent to Worldscale 124.17, the biggest drop since Jan. 23, Baltic Exchange data showed. The cost of shipping on the route fell 5 percent last week, the most in 11 weeks.
The rate of shipping 30,000 tons of oil products from Singapore to Japan rose 0.3 percent to Worldscale 198.96 yesterday, a second day of gains. It has slumped 33 percent this year.
Tuesday, June 26, 2007
IEA June 2007 Report on Tanker Rates
Crude freight rates gradually eased from near the top of five-year ranges in early May to finish the month below seasonal averages. Floating storage charters in the US Gulf and some increased long-haul trading restrained crude tanker supply. This prevented a dramatic slide in dirty rates, despite Nigerian outages and muted OPEC exports continuing to undermine vessel demand. Refinery maintenance in Asia supported product trade and demand for clean tankers. Low stocks and refinery outages maintained the need for gasoline imports into the US in May.
Trade data reveal that Nigeria was the third-largest provider of crude to the US in March, above Saudi Arabia for the first time. However, extensive outages have now reduced Nigerian export cargoes. OPEC cuts remain in place and Vela spot charters for June are reportedly near three-year lows. Furthermore, refinery maintenance, now focussed on Asia, usually undermines vessel demand in May. Despite these factors, VLCC freight rates had fallen only slightly below five-year averages by the end of May. Middle East Gulf rates to Japan and the US Gulf in early May were well above average, reaching around $13/tonne and $22/tonne respectively. One month later, rates for both routes had only dropped by around $2/tonne. They remain higher, on a $/tonne basis, than almost all rates seen between mid-October and February.
One factor supporting rates has been the reductions to vessel supply caused by the increased use of VLCCs as floating storage in the US Gulf. The prevailing wide contango in WTI has made it economic to charter VLCCs specifically for floating storage. Some VLCCs arriving in the US Gulf with valuable African crude have also invoked a clause to store offshore before discharging.
Vessel supply has been further reduced by incremental long-haul chartering. Asian purchases of West African crude reportedly hit 14-month highs for June on increased buying from China and evidence of the first cargoes for Indonesia in more than a year. Clearly Nigerian exports may be disrupted, but Angolan loading schedules suggest exports there will increase. Furthermore, Indian refiners have been increasingly looking to Mediterranean crude markets and there has even been a recent Chinese purchase of Canadian crude.
Elsewhere in the dirty sector, Nigerian outages caused westbound Atlantic Suezmax rates to weaken by $2-3/tonne in May. Cross-Mediterranean Aframax rates showed their volatility again by falling from sixmonth highs of $21/tonne in early May to 18-month lows of $7/tonne in early June. Aframax demand in June has been dented by a rise in Russian export duties and North Sea maintenance.
Clean product tanker rates rose in May. Asian clean rates were supported by increased trade of productsduring refinery maintenance. Rising Asian petrochemical capacity continues to boost demand for naphtha imports from Saudi Arabia and India. In the Atlantic basin, discharging delays caused an unusually large vessel backlog at Lagos port in late May, temporarily reducing vessel supply. Transatlantic clean rates were further boosted by the continued need for gasoline imports in the US, where stocks remain historically low. UK continent to US Atlantic Coast rates for 33,000-tonne clean cargoes rose by $4/tonne from the start of May to reach $28/tonne in early June.
Trade data reveal that Nigeria was the third-largest provider of crude to the US in March, above Saudi Arabia for the first time. However, extensive outages have now reduced Nigerian export cargoes. OPEC cuts remain in place and Vela spot charters for June are reportedly near three-year lows. Furthermore, refinery maintenance, now focussed on Asia, usually undermines vessel demand in May. Despite these factors, VLCC freight rates had fallen only slightly below five-year averages by the end of May. Middle East Gulf rates to Japan and the US Gulf in early May were well above average, reaching around $13/tonne and $22/tonne respectively. One month later, rates for both routes had only dropped by around $2/tonne. They remain higher, on a $/tonne basis, than almost all rates seen between mid-October and February.
One factor supporting rates has been the reductions to vessel supply caused by the increased use of VLCCs as floating storage in the US Gulf. The prevailing wide contango in WTI has made it economic to charter VLCCs specifically for floating storage. Some VLCCs arriving in the US Gulf with valuable African crude have also invoked a clause to store offshore before discharging.
Vessel supply has been further reduced by incremental long-haul chartering. Asian purchases of West African crude reportedly hit 14-month highs for June on increased buying from China and evidence of the first cargoes for Indonesia in more than a year. Clearly Nigerian exports may be disrupted, but Angolan loading schedules suggest exports there will increase. Furthermore, Indian refiners have been increasingly looking to Mediterranean crude markets and there has even been a recent Chinese purchase of Canadian crude.
Elsewhere in the dirty sector, Nigerian outages caused westbound Atlantic Suezmax rates to weaken by $2-3/tonne in May. Cross-Mediterranean Aframax rates showed their volatility again by falling from sixmonth highs of $21/tonne in early May to 18-month lows of $7/tonne in early June. Aframax demand in June has been dented by a rise in Russian export duties and North Sea maintenance.
Clean product tanker rates rose in May. Asian clean rates were supported by increased trade of productsduring refinery maintenance. Rising Asian petrochemical capacity continues to boost demand for naphtha imports from Saudi Arabia and India. In the Atlantic basin, discharging delays caused an unusually large vessel backlog at Lagos port in late May, temporarily reducing vessel supply. Transatlantic clean rates were further boosted by the continued need for gasoline imports in the US, where stocks remain historically low. UK continent to US Atlantic Coast rates for 33,000-tonne clean cargoes rose by $4/tonne from the start of May to reach $28/tonne in early June.
Monday, June 25, 2007
Persian Gulf Tanker Rates May Fall for Sixth Day
Persian Gulf Tanker Rates May Fall for Sixth Day on Ship Glut
By Alaric Nightingale
June 25 (Bloomberg)
The cost of hiring supertankers to transport Middle East crude oil on the busiest shipping route to Asia, which fell every day last week, may extend its decline as demand for July cargoes fails to cut an oversupply of vessels.
Refineries still need to hire about 60 percent of the vessels they need to ship cargoes from Persian Gulf ports next month. A glut of carriers ``appears to be keeping a cap on things at the moment,'' said Simon Chattrabhuti, an analyst at London-based shipbroker Galbraith's Ltd., in an e-mailed note.
Demand has so far failed to emerge for this week, Chattrabhuti said, adding that rental rates are ``maybe a bit softer so far.'' Ship brokers normally spend the first working day of the week producing so-called position lists that show the locations of oil tankers and when they will next be available for hire. The state of supply and demand usually becomes clearer the following day.
SK Corp., South Korea's biggest refiner, hired the carrier Front Highness at a rate of 62.5 Worldscale points, according to a report from Paris-based Barry Rogliano Salles. That's 7 percent below the London-based Baltic Exchange's June 22 benchmark assessment of 67.22 points.
Forty-five tankers have been hired already to load in July, compared with an average of 106 bookings a month last year, according to Barry Rogliano. There are 103 tankers available for hire up to July 25, the broker said in a report today.
At 67.22 Worldscale points, owners of modern very large crude carriers, or VLCCs, can earn about $38,830 a day on a 38- day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg bunker prices.
Sunday, June 24, 2007
Persian Gulf Tanker Rates May Rise
Persian Gulf Tanker Rates May Rise as OPEC Production Climbs
By Alaric Nightingale
June 19 (Bloomberg)
The cost of shipping Middle East crude to Asia, which fell yesterday for the first time in five days, may rise as OPEC members increase oil production, bolstering tanker demand.
The expectation of higher output may allow operators to negotiate higher charter rates, said Nikos Varvaropoulos, a tanker broker for Optima Shipbrokers in Athens. The International Energy Agency, an adviser to 26 oil-consuming nations, said June 12 that the Organization of Petroleum Exporting Countries' production will climb by 700,000 barrels a day in the third and fourth quarters.
``That's why owners are bullish,'' Varvaropoulos said in an e-mailed note today. ``The market will pick up.''
Chevron Corp., the second-largest U.S. oil company, hired the vessel Oriental Jade at a rate of 80 Worldscale points, according to a report today from Paris-based shipbroker Barry Rogliano Salles. That's 15 percent above the London-based Baltic Exchange's benchmark assessment of 69.67 points for shipments to Asia.
Worldscale points are a percentage of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in U.S. dollars per ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
At 71.02 Worldscale points, owners of modern very large crude carriers, or VLCCs, can earn about $42,786 a day on a 38- day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg bunker prices.
Frontline Ltd., the world's biggest oil-tanker company by capacity, said May 30 that it needs $29,500 a day to break even on each of its VLCCs.
The scale of the Middle East exports for next month may become clearer this week as oil-producing countries reveal when oil companies must have vessels in place to call at Persian Gulf ports for July, shipbrokers including Nor Ocean Stockholm AB and Capital Shipbrokers said yesterday.
Friday, June 22, 2007
Asian Aframax Ship Rate Gains
Asian Aframax Ship Rate Gains May Be Limited on Rising Supply
By Katherine Espina
June 21 (Bloomberg)
Gains in the cost of shipping 80,000 metric tons of oil on Asian routes may be curbed in the next several days as the supply of tankers increases, brokers including Matsui & Co. said.
The rate of shipping crude or fuel oil on so-called Aframax tankers to Singapore from Kuwait climbed for a second day, gaining 1.7 percent to 148.27 yesterday, according to the London-based Baltic Exchange. Shipment cost on the route fell 1.2 percent in the week ended June 15, the first decline in three weeks.
``There will be many vessels available in the Singapore area in the early part of July so the market may stay the same or even move lower,'' Kats Nishikawa, general manager at the chartering team of Matsui & Co. in Tokyo, said by phone. ``Unless we see more activity in the Singapore area, the market may be softer.''
This month, there are 12 Aframax tankers sailing to Singapore, according to AISLive on Bloomberg. The cost of shipping crude on Aframax vessels to Asian routes has declined 7.4 percent this year as capacity expanded.
The Baltic Dirty Tanker Index, which tracks 12 routes, has fallen 19 percent this year. The cost of shipping a barrel of oil on an Aframax vessel on the Kuwait-to-Singapore route stood at $1.97 as of June 20, unchanged for the previous 19 days, according to Bloomberg data.
Japan Bound
The Aframax tanker rate on the Indonesia-to-Japan route was steady at Worldscale 157.50, the daily cost for the past 12 days, according to Bloomberg data. Shipping a barrel of oil on the route amounts to $1.84, steady for the past two weeks, according to Bloomberg data.
The cost of shipping gasoline and other so-called clean petroleum products to Asia declined yesterday, according to the Baltic Exchange.
The cost of shipping 30,000 tons of oil products from Singapore to Japan fell 0.6 percent to Worldscale 200.42 yesterday, the lowest in eight weeks. It has slumped 20 percent the past four weeks, based on data from the Baltic Exchange.
Shipping costs for 55,000 tons of products on the route to Japan from the Middle East dropped 2.2 percent to Worldscale 161.92, the lowest since Feb. 15. The rate has fallen 17 straight days.
The cost of carrying 75,000 tons of gasoline, naphtha or jet fuel from Singapore to Japan declined for an eighth day. The rate dropped 1.5 percent to Worldscale 131.46 yesterday, the lowest in four months, Baltic Exchange data showed. The cost of shipping on the route fell 3.2 percent last week, the second weekly decline.
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