Monday, August 27, 2007

Persian Gulf Oil-Tanker Rates May Drop

Persian Gulf Oil-Tanker Rates May Drop as Vessel Demand Wanes
By Alaric Nightingale
Aug. 24 (Bloomberg)

The cost of shipping Middle East crude to Asia, the world's busiest market for supertankers, may drop, paring this week's 31 percent gain, as vessel demand from refineries wanes.

Demand is ``quiet'' and there are ``plenty'' of tankers for hire, Nikos Varvaropoulos, an Athens-based tanker broker for Optima Shipbrokers, said in an e-mailed note today.

Tianbao, a Chinese oil trader, hired the carrier Asian Progress II at a rate of 70 Worldscale points, according to a report today from Paris-based shipbroker Barry Rogliano Salles. That's 6.6 percent more than the London-based Baltic Exchange's assessment of 65.67 points for shipments to Asia.

Asian Progress II is fitted with two layers of steel separating its cargo from the ocean, cutting the risk of an oil spill in the event of a collision. The exchange's assessment also takes into account single-hull tankers that cost less to hire. The benchmark has climbed 31 percent since Aug. 17.

More Than Enough

There are more than enough tankers available for hire, according to Barry Rogliano Salles. A hundred vessels can reach the Middle East by Sept. 24, with about 55 more cargoes likely to be loaded in the month, based on average monthly demand, the broker said.

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