Thursday, August 16, 2007

Asia Rates Fall to Lowest in 5 Months

Asia Aframax Tanker Rates Fall to Lowest in Almost Five Months
By Katherine Espina
Aug. 16 (Bloomberg)

The rate for tankers that can carry 80,000 metric tons of fuel or crude oil fell to the lowest in almost five months and may extend the decline until charterers book to transport September cargoes.

The rate for Aframax tankers on the Kuwait-to-Singapore route dropped 1.4 percent to Worldscale 127.29 yesterday, the lowest since March 20, according to data from the London-based Baltic Exchange. It has declined 3.7 percent in the past four days. That puts the cost of shipping a ton of oil on the route at $13.46, Bloomberg data showed.

``There's been very few activity for some time,'' Takeshi Ando, a shipbroker at Matsui & Co's tanker team, said by phone from Tokyo. ``There have been short-haul fixtures in the Indonesia area but no long-haul.''

There were nine tankers scheduled to arrive in Singapore last week and another two this week, capable of carrying a total of 1.2 million tons of cargo, according to Bloomberg data.

The cost of moving 80,000 tons of oil to Japan from Indonesia was at Worldscale 127.50 yesterday, unchanged from Aug. 15, according to Bloomberg data. That puts the cost of shipping a ton of oil on the route at $11.12.

The rate on the Indonesia to Japan route may hover at around Worldscale 120 this week, Matsui's Ando said.

``There's just too many ships available for spot business, and tanker rates should therefore remain low going forward,'' DNB Nor Markets analysts Glenn Lodden and Henrik With said in their weekly report. DNB Nor Markets is a division of DNB Nor Bank ASA, Norway's biggest bank.

Oil Products

The cost of transporting gasoline, diesel and other oil products on medium- to long-range tankers were lower yesterday. The rate of shipping 30,000 tons of oil products to Japan from Singapore declined 0.2 percent to Worldscale 222.08, according to the Baltic Exchange. It lost 8.9 percent in the past 12 days.

The cost of moving 55,000 tons of products to Japan dropped 0.6 percent to Worldscale 185.63, the lowest in five weeks.

The rate for shipping 75,000 tons of oil products fell 0.5 percent to Worldscale 153.86 yesterday, based on data on the Baltic Exchange.

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