Wednesday, August 29, 2007

Persian Gulf Oil-Tanker Rates May Extend Drop

Persian Gulf Oil-Tanker Rates May Extend Drop as Demand Stalls
By Alaric Nightingale
Aug. 29 (Bloomberg)

The cost of shipping Middle East crude oil to Asia, the biggest market for supertankers, may fall for a second consecutive day as demand stalls amid a glut of vessels.

Refineries currently have no cargoes they are trying to secure tankers for, Nikos Varvaropoulos, a broker for Athens- based Optima Shipbrokers, said in an e-mailed note today. Vessel supply for September is about double the month's demand, according to data today from Paris-based shipbroker Barry Rogliano Salles.

Sinochem Corp., China's biggest petrochemicals trader, hired the tanker New Vision at a rate of as much as 72 Worldscale points, according to a report today from Barry Rogliano. That's about 9.5 percent above the London-based Baltic Exchange's benchmark rate of 65.78 points for voyages to Asia yesterday.

New Vision costs more to rent than the benchmark because it has two steel hulls separating its cargo from the ocean to cut the risk of an oil spill. The exchange's assessment also takes into account older, single-hull ships.

$34,989 a Day

At 65.78 Worldscale points, owners of double-hulled very large crude carriers, or VLCCs, can earn about $34,989 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 said Aug. 22 it needs $30,000 a day to break even on each of its supertankers.

There are 55 tankers booked to ship oil from the Middle East next month, about half the monthly average, according to Barry Rogliano. About 100 tankers can reach Fujairah in the United Arab Emirates by Sept. 25, according to the broker.

Persian Gulf Tanker Rates May Fall as Demand Slows, OPEC Stalls
By Alaric Nightingale
Aug. 28 (Bloomberg)

The cost of shipping Middle East crude to Asia, the world's busiest market for supertankers, may fall in the wake of yesterday's U.K. national holiday and as OPEC fails to boost production.

The market ``doesn't look good'' today because more than half the September shipments have been arranged and booking levels are ``usually'' slow at this time, Per Mansson, a tanker broker at Nor Ocean Stockholm AB, said in an e-mailed note.

Members of the Organization of Petroleum Exporting Countries, supplier of about 40 percent of the world's crude, have yet to boost supplies as the northern hemisphere's summer comes to an end, according to Mansson and Nikos Varvaropoulos, a broker with Optima Shipbrokers in Athens. Shipping lines including Frontline Ltd., the world's largest operator of supertankers, are counting on OPEC to increase shipments in the fourth quarter, stoking demand for tankers.

No bookings of very large crude carriers, or VLCCs, from the Middle East were reported today or yesterday by shipbrokers. The benchmark hire rate climbed 31 percent to 65.94 Worldscale points last week, according to data from the London-based Baltic Exchange, the biggest five-day gain since May.

The crude market is ``well supplied,'' OPEC Secretary- General Abdalla El-Badri, said yesterday, prompting speculation the group won't raise output targets when it meets next month.

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