Thursday, October 18, 2007

Aframax Rates Rise

Caribbean Tanker Rate Increases on Competition From Europe
By Todd Zeranski
Oct. 18 (Bloomberg)

The rate to transport oil from the Caribbean advanced, spurred by higher prices in European shipping markets.

``Mediterranean activity has increased, so some owners are moving there,'' said Mike Jedlicke, a broker at Dietze & Associates LLC in Wilton, Connecticut. ``That's thinning out'' the number of available vessels, straining Caribbean supply.

Stronger Aframax bookings in the Mediterranean and the Black Sea forces Caribbean-area charterers to pay higher rates to keep vessels in the region.

The average Aframax rate advanced 15 points, or 11 percent, to Worldscale 155. WS 155 is equal to about $20,325 a day, after expenses such as fuel and port fees.

The rate fell to WS 92.5 on Sept. 11, the lowest since 2001, according to Bloomberg data. Rates increased 22 percent yesterday and are up 48 percent this week.

Malaysia's Eagle Anaheim Nereo is scheduled to reach its Houston destination on Oct. 21, according to Bloomberg data.

The Caribbean is the world's third-largest Aframax-tanker market after the Mediterranean and Southeast Asia. An Aframax is the most common tanker used to move oil in the region.

Persian Gulf Tanker Rates May Rise as Fuel Prices Crimp Income
By Alaric Nightingale
Oct. 18 (Bloomberg)

The cost of shipping Middle East crude to Asia, the world's busiest market for supertankers, may rise for an eighth day as soaring refueling prices continue to crimp income from rentals.

Record marine fuel, or bunker, costs mean some owners, who rented extra tankers at fixed prices anticipating rising demand in the northern hemisphere winter, may be losing about $30,000 a day when they lease out those ships in the day-to-day, or spot market, Charlie Fowle, a director at London-based shipbroker Galbraith's Ltd., said by phone today.

``The bunker factor at the moment is dramatic,'' Fowle said. ``Just to get the same return, owners need 10 to 20 percent more'' from the oil companies who book their ships.

Hyundai Merchant Marine, a South Korean shipowner, hired the tanker Hebei Spirit at a rate of 59 Worldscale points, according to a report from Athens-based Optima Shipbrokers today. That's 3.5 percent above the London-based Baltic Exchange's benchmark assessment of 57.03 Worldscale points for cargoes to Asia.

Hebei Spirit should normally cost less to hire than the benchmark because it's fitted with one steel hull separating its cargo from the ocean. The exchange's assessment also includes carriers with two steel hulls that cut the risk of an oil spill in the event of an accident and usually have better engines.

At 57.03 Worldscale points, owners of double-hulled very large crude carriers, or VLCCs, can earn about $20,024 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 marine fuel prices.

A week ago, the same rate of 57.03 points would have earned $3,500 a day more when the cost of bunkers was 9 percent cheaper.

No comments: