Imarex/SHX Closing Prices 09.28.07 (Fri)

Imarex
TD3: not available - VLCC - Ras Tanura (Saudi Arabia) to Chiba (Japan), 260,000mt
TC2: not available - MR2 - Rotterdam to New York (USAC)

SHX: 378.47 ( -2.67/-0.70% ) - PHLX Marine Shipping Index (at highs)





Baltic Dirty Tanker Index: 920 ( -1.29%)

OTII Rates	Sept. 28	Fri	4pm	prev wk
From	To	Size	WS	change
AG	Singapore	260 K	70.00	+ 7.50
AG	Japan	250 K	67.50	+ 6.00
AG	USG	280 K	47.50	0
WAF	USG	260 K	60.00	0
WAF	USAC	130 K	87.50	- 5.00
Indonesia	Japan	80 K	115.00	0

Imarex/SHX Closing Prices 09.28.07
Imarex, PHLX, SHX, WS, Worldscale, Baltic Dirty Tanker Index, BDTI, chart, graph

IEA Monthly Oil Market Report September

Crude tanker rates, already at multi-year lows on certain routes in early August, remained very weakthroughout the month. Low oil-in-transit volumes and the resultant vessel surplus continue to keep VLCC rates unseasonably low. An expanding tanker fleet has been a bearish influence this year and while scrapping activity has apparently remained modest, conversions to more profitable dry bulk carriers have risen.

VLCC rates from the Middle East Gulf to Japan languished just above the $7/tonne mark for the first half of August. This reflected weak tanker fundamentals, even by summer standards. A temporary $2/tonne mid-month jump to over $9/tonne resulted from greater chartering activity on the route, coinciding with reports of an upturn in September OPEC sailings, especially on eastbound routes. Rising OECD refinery throughputs from October, after autumn maintenance, also offered potential support for near-term demand for crude transportation. Still, Japan-bound rates faded to finish August at $8.50/tonne. VLCC rates from the Middle East Gulf to the US Gulf were equally weak in August, remaining flat at around $14/tonne. This compares with rates of $25/tonne at the end of August 2006; a busy period of chartering before OPEC cuts were implemented.

Crude tanker rates from West Africa fell to their lowest point for two years, in $/tonne terms, by early September. Suezmax rates to the US Atlantic finished near $7/tonne, down by $2/tonne on the month. Transatlantic VLCC rates fell by even more. Despite greater demand for eastbound voyages, regional vessel demand has otherwise been undermined by recent refinery outages and approaching maintenance. Caspian production maintenance will reduce September BTC (Baku-Tbilisi-Ceyhan) export volumes, potentially adding downside to Mediterranean Suezmax rates in the coming weeks.

Clean tanker rates broadly fell in August, with the exception of LR1 routes (75,000 tonnes) from the Middle East Gulf to Japan. Rates on this trade rose by $2/tonne on the month to end at over $21/tonne in early September. Support came from firm naphtha demand from North Asian petrochemical plants, plus reports of reduced regional vessel availability following some gasoil arbitrage trade from Asia to Europe. In Western markets, transatlantic 35,000-tonne clean rates to the US drifted from a mid-month peak of $16/tonne to around $13/tonne, despite improving arbitrage economics at the end of August.

Likely Tanker Demand Increase

If OPEC increases production 500,000 barrels per day in the run-up to Nov. 1st, Saudi Arabia and Kuwait's allotment combined is 400,000 bpd. The remaining 100,000 bpd is Venezuela's. All the other OPEC-10 countries have no commitment but to stay flat.

400,000 barrels is one VLCC leaving every 5 days. With the 38-day round trip from the Gulf to Asia, this creates the need for a maximum of 8 VLCCs in addition to what are being currently employed.

But there is a catch. The UAE has a planned 600,000 bpd decrease in production due to maintenance scheduled for November. It is unclear how long this outage will last, but the expectation would be for only one month.

Imarex Freight Futures for the TD3 route spiked to WS79 from WS56 on Deutsche Bank's recommendation. Seasonal factors may also be playing a part in tanker rates bouncing off their lows. But the need for only 8 more supertankers is unlikely to push these rates much higher than where they were in 2006.

Bloomberg Roundup September 23rd

Buy Futures for Persian-Gulf Oil Tankers, Deutsche Bank Says
By Grant Smith
Sept. 21 (Bloomberg)

Investors should buy futures contracts for tankers shipping crude from the Middle East because Saudi Arabia will probably raise output, Deutsche Bank AG said.

Freight rates for supertankers hauling crude cargoes from the Persian Gulf to Japan, a route known as TD3, are close to a four-year low as fleet expansion outpaces growth in demand for oil. Saudi Arabia is set to contribute the largest share of a 500,000 barrel-a-day output increase to be implemented by the Organization of Petroleum Exporting Countries from Nov. 1.

``Any increase in Saudi production we expected would be reflected in a rally in TD3 rates,'' Deutsche Bank analysts including Michael Lewis in London and Adam Sieminski in New York said in a report today. ``We find that Middle East oil production has tended to be loosely correlated with TD3 freight levels.''

A rise in shipping costs would be the first indicator that Saudi Arabia intends to deliver on the OPEC pledge and reverse the 1 million-barrel-a-day production cut implemented from the start of the year, the analysts said.

Freight rates for the TD3 route fell to a four-year low of 48.94 Worldscale points on Sept. 13, according to the London- based Baltic Exchange.

Persian Gulf Oil Tanker Rates Increase the Most in Four Weeks
By Grant Smith
Sept. 21 (Bloomberg)

The cost of transporting Middle East crude oil to Asia, the busiest market for supertankers, posted its biggest gain in four weeks as bookings accelerated for ships loading in October.

There have been 34 October bookings reported this week by Paris-based shipbroking firm Barry Rogliano Salles, compared with 21 the week before. Hire rates have advanced amid simultaneous bookings for vessels on the same dates next month, said Barry Rogliano broker Mathieu Philippe.

``Sentiment has changed,'' Philippe said by telephone from Dubai. ``I would anticipate October's going to be more active than September, and rates are going slightly higher.''

Rates for very large crude carriers, or VLCCs, hauling crude from the Persian Gulf to Japan rose 12 percent to 58.3 Worldscale points yesterday, the biggest daily increase since Aug. 22, according to London's Baltic Exchange. Rates fell to a four-year low of WS 48.9 on Sept. 13 as the growth in the global fleet of tankers outpaced the increase in demand for oil.

``Owners realized it was better keeping ships idle, and an artificial shortage was created,'' Philippe said. Some owners may be making a loss on the tankers they hire because of record prices for ship fuel and declining freight rates.

At WS 58.3, owners of double-hulled VLCCs can earn about $24,166 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.

Asian Aframax Tanker Rates Fall on Bookings Dearth, Ship Glut
By Katherine Espina
Sept. 21 (Bloomberg)

Asian rates for tankers that can carry 80,000 metric tons of oil may extend a decline next week from a three-week low as the pace of bookings slowed, increasing the number of vessels competing for cargo.

The aframax tanker rate for transporting oil from Kuwait to Singapore, the world's fourth-busiest route for such vessels, fell 0.31 percent to Worldscale 120.58 yesterday, its third day of decline, according to data from the London-based Baltic Exchange. Shipping a ton of fuel on the route costs $12.46, according to Bloomberg data.

Aframax rates dropped 3 percent last week as bookings stalled in the third quarter, a typically slow period. One aframax tanker carrying 106,680 tons of cargo is scheduled to arrive in Singapore next week from six tankers, capable of carrying 621,445 tons, this week, Bloomberg data showed.

Ship-owners had difficulty maintaining rates last week as there were ``too many ships relative to chartering activity,'' Dnb NOR Markets analysts Henrik With and Glenn Lodden said in their report. ``Vessel availability is still massive, which will act to cap the potential for any significant increase.''

Almost 60 million deadweight tons of double-hull aframax tankers were in service at the end of 2006, and the fleet is expected to rise to over 80 million tons at the end of 2009, according to France-based shipbroker Barry Rogliano Salles.

Southeast Asia is the world's second-busiest aframax market, after the Mediterranean. The Caribbean is the third busiest.

OPEC Cargoes May Rise 0.6% in Month to Oct. 6, Consultant Says
By Grant Smith
Sept. 20 (Bloomberg)

OPEC's daily shipments of crude will probably rise 0.6 percent in the four weeks to Oct. 6 from the previous month after the group agreed to increase output, the consultant Oil Movements said.

The Organization of Petroleum Exporting Countries will load an estimated 24.19 million barrels a day onto tankers, compared with 24.05 million in the month ended Sept. 8, the Halifax, England- based consultant wrote in a report today.

The 10 OPEC members bound by quotas decided at a Sept. 11 meeting in Vienna to raise production by 500,000 barrels a day to relieve the effect of record prices on global economic growth.

Shipments from the Middle East will increase 0.3 percent to an average 17.25 million barrels a day, from 17.2 million barrels in the four weeks to Sept. 8, Oil Movements said. The total amount of oil on tankers will climb 0.3 percent to 458.54 million barrels, it predicted.

Persian Gulf Tanker Rates Extend Advance as Owners Stand Firm
By Grant Smith
Sept. 20 (Bloomberg)

The cost of transporting Middle East crude oil to Asia, the busiest market for supertankers, rose for a fourth day as shipowners refused to offer discounts.

Owners of very large crude carriers, or VLCCs, may already be losing money on the vessels they hire out as record oil prices sap demand and the global fleet expands. Rates have rebounded 6.3 percent from a four-year low on Sept. 13.

``Owners have been able to take the initiative even when volumes are not so high,'' Finn Engelsen, managing director of shipbroker Lorentzen & Stemoco, said by phone from Oslo. ``But you need a stronger inducement for a rally, and we are not going to get a rally with these economic conditions.''

Rates for VLCCs hauling crude from the Persian Gulf to Japan rose to 52.03 Worldscale points yesterday, according to London's Baltic Exchange. Hire costs have also gained because of Typhoon Waipha off China and tropical storms near the Gulf of Mexico. Strong winds can delay tankers and reduce vessel supplies.

At 52.03 Worldscale points, owners of double-hulled VLCCs can earn about $17,421 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.

Imarex/SHX Closing Prices 09.21.07(Fri)

Imarex
TD3: WS79 ( sharp rise ) - VLCC - Ras Tanura (Saudi Arabia) to Chiba (Japan), 260,000mt
TC2: WS201 ( rise ) - MR2 - Rotterdam to New York (USAC)

SHX: 367.70 ( +13.61/+3.84% ) - PHLX Marine Shipping Index

Baltic Dirty Tanker Index: 944 ( +1.07%)
Sharp Rise

OTII Rates	Sept. 21	Fri	4pm	prev wk
From	To	Size	WS	change
AG	Singapore	260 K	62.50	+ 12.50
AG	Japan	250 K	61.25	+ 11.25
AG	USG	280 K	47.50	+ 5.00
WAF	USG	260 K	57.50	+ 15.00
WAF	USAC	130 K	92.50	+ 20.00
Indonesia	Japan	80 K	115.00	0

Imarex/SHX Closing Prices 09.21.07
Imarex, PHLX, SHX, WS, Worldscale, Baltic Dirty Tanker Index, BDTI, chart, graph

Tanker Sector Analyst Forum

http://shipping.capitallink.com/forums/2007/tanker/main.html

Live Webcast 11am EST Thursday, September 20th

OSG Adds 4 Suezmax Tankers

OSG Adds New Tanker Class to Its Crude Oil Fleet with Four Suezmax Vessels
(BUSINESS WIRE)

Overseas Shipholding Group, Inc. (NYSE:OSG), a market leader in providing energy transportation services, announced today it has expanded its crude oil tanker fleet with the addition of four Suezmax vessels. The vessels complement OSG’s crude oil tanker fleet of ULCCs, VLCCs, Aframaxes and Panamaxes. Ranging in size between 120,000 and 200,000 deadweight tons (dwt), Suezmaxes offer greater port flexibility than VLCCs and better economies of scale than Aframax tankers. The addition of the vessel class to OSG’s fleet enhances its ability to offer customers a full range of vessel options when transporting crude oil throughout the world.

Mats Berglund, head of OSG’s Crude Oil Tanker Strategic Business Unit, commented, “OSG is now the only ship owner in the world that can offer customers service in all crude oil tanker segments as well as lightering. In addition, the vessels enhance our ability to gather market intelligence enabling us to better understand and respond to changes in the market and to better serve the needs of our customers.”

OSG has purchased, sold and bareboat chartered-back two Suezmax tankers from Double Hull Tankers, Inc. (NYSE: DHT). OSG expects to take delivery of a 2001-built 164,000 dwt vessel in December 2007 and the second ship, a 2000-built 153,000 dwt vessel, is expected to deliver to OSG in the first quarter of 2008. The vessels have been chartered for seven and 10 years, respectively.

OSG has time chartered-in two 156,000 dwt sister ships for three years. The vessels, currently under construction in China, are expected to deliver in the fourth quarter of 2008.

Bloomberg Roundup

Persian Gulf Tanker Rates May Rise as Typhoon Approaches China
By Grant Smith
Sept. 18 (Bloomberg)

The cost of transporting Middle East crude oil to Asia, the busiest market for supertankers, may rise for a third day as a typhoon approaches China, disrupting the supply of vessels.

Storms in the Atlantic and Pacific have delayed tankers, lifting rates from a four-year low last week. Typhoon Wipha is passing north Taiwan with winds of 156 miles an hour, while a tropical storm may develop off the coast of Florida this week and sweep into the Gulf of Mexico, according to the U.S. National Hurricane Center.

The cost of hiring a tanker ``appears to have bottomed out,'' Halvor Ellefsen, an Oslo-based tanker broker for SeaLeague AS, said in a telephone interview today. ``It's the weather, it's stronger demand from the Far East.''

Rates for very large crude carriers, or VLCCs, hauling oil from the Persian Gulf to Japan rose a second day to 49.95 Worldscale points yesterday, according to London's Baltic Exchange.

Record oil prices and the risk that OPEC may fail to deliver additional crude supplies pledged at its meeting last week may check further gains in freight rates, Ellefsen said. The Organization of Petroleum Exporting Countries agreed to pump an extra 500,000 barrels a day from November.

The tanker fleet has expanded 4 percent this year, according to Drewry Shipping Consultants, while the International Energy Agency forecasts oil consumption will rise 0.4 percent.

Persian Gulf Tanker Rates May Snap Three-Day Increase
By Grant Smith
Sept. 19 (Bloomberg)

The cost of transporting Middle East crude oil to Asia, the busiest market for supertankers, may snap a three-day rise as record oil prices curb demand and leave a build-up of available tankers.

There may be enough very large crude carriers, or VLCCs, available in the first three weeks of October to handle an entire month's allocation of Persian Gulf cargoes, according to a report today by shipbrokers Barry Rogliano Salles in Paris. Crude oil traded in New York reached a record $82.38 a barrel yesterday.

``The line-up of VLCCs for the next 30 days has steadily been increasing,'' said Sverre Bjorn Svenning, director at shipbrokers Fearnleys AS in Oslo. ``It's almost as bad as it can get.''

Rates for VLCCs hauling oil from the Persian Gulf to Japan rose to 50.73 Worldscale points yesterday, according to London's Baltic Exchange. Rates have rebounded 3.7 percent from a four- year low on Sept. 13 as storms in the Atlantic and Pacific delayed ships and reduced availability.

There are 99 tankers, including those that have been provisionally booked, that could be hired in the Gulf through to Oct. 19, equal to the total shipments that were arranged for this month, according to Barry Rogliano's report.

At 50.73 Worldscale points, owners of double-hulled VLCCs can earn about $15,670 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 VLCC operator, said Aug. 22 it needs $30,000 a day to break even on each of its supertankers.

Imarex/SHX Closing Prices 09.14.07 (Fri)

Imarex
TD3: WS56 ( -2 ) - VLCC - Ras Tanura (Saudi Arabia) to Chiba (Japan), 260,000mt
TC2: WS174 ( -1 ) - MR2 - Rotterdam to New York (USAC)

SHX: 342.67 ( -0.45/-0.13% ) - PHLX Marine Shipping Index

Baltic Dirty Tanker Index: 805 ( +0.50%)

OTII Rates	Sept. 14	Fri	4pm	prev day
From	To	Size	WS	change
AG	Singapore	260 K	50.00	0
AG	Japan	250 K	50.00	0
AG	USG	280 K	42.50	0
WAF	USG	260 K	47.50	0
WAF	USAC	130 K	72.50	0
Indonesia	Japan	80 K	115.00	0

Imarex/SHX Closing Prices 09.14.07
Imarex, PHLX, SHX, WS, Worldscale, Baltic Dirty Tanker Index, BDTI, chart, graph

Persian Gulf Tanker Rates May Climb

Persian Gulf Tanker Rates May Climb as OPEC Boosts Crude Output
By Alaric Nightingale
Sept. 12 (Bloomberg

The cost of shipping Middle East crude to Asia, the world's busiest market for supertankers, may rise as OPEC boosts output by 500,000 barrels a day, increasing the number of cargoes.

``This is positive for tanker owners,'' London-based shipbroker Galbraith's Ltd. said in an e-mailed note today, adding that extra cargoes could ``creep'' into the market in October. OPEC members have ``historically'' pre-empted the official start of output increases, which is due to be November.

Shipping lines including Frontline Ltd., the world's biggest operator of very large crude carriers, or VLCCs, need more exports from Organization of Petroleum Exporting Countries to reverse losses from day-to-day rentals and eliminate a glut of vessels competing for cargoes.

Hyundai Merchant Marine Co., a South Korean shipping line, hired the VLCC BW Noto at a rate of 50 Worldscale points, according to a report today by Paris-based shipbroker Barry Rogliano Salles.

That's 3 percent below the London-based Baltic Exchange's benchmark assessment of 51.63 points for shipments to Asia, which has fallen for the past 11 days.

BW Noto is likely to cost less than the benchmark because it's fitted with one hull separating its cargo from the ocean. The exchange's rate also reflects rentals of two-hulled tankers that cut the risk of an oil spill and normally cost more to hire.

Bunker Prices

At 51.63 Worldscale points, owners of double hulled VLCCs, can earn about $18,620 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 VLCC operator, said Aug. 22 it needs $30,000 a day to break even on each of its supertankers.

There are probably about 16 outstanding bookings to be made in September and 104 in October, based on average monthly loadings from Middle East ports this year, according to a report today from Barry Rogliano Salles. One hundred and eight VLCCs will be available for hire in the region by Oct. 12.

Bookings for VLCCs sailing from the Middle East to Asia account for 47 percent of global demand for the carriers, according to New York-based McQuilling Brokerage Partners LLP. Shipments to the U.S. and Caribbean, the second-biggest market, account for 14 percent of demand for supertankers.

Persian Gulf Tanker Rates May Rise, Capital Shipbrokers Says
By Alaric Nightingale
Sept. 11 (Bloomberg)

The cost of shipping Middle East crude to Asia, the world's busiest market for supertankers, may rise as demand for the raw material increases before winter in the northern hemisphere, according to Capital Shipbrokers LP.

``Heating oil production reduces inventory,'' Tim Coffin, head of research for the London-based company said in an e-mailed note published today. Refinery demand will lead to an ``autumn bounce'' in the cost of renting ships, he said.

Rental rates have declined 22 percent since Aug. 24 because of a glut of tankers.

China International United Petroleum & Chemical Corp., or Unipec, hired the tanker La Madrina at 55 Worldscale points, a measure of the cost of renting ships, according to a report today from Athens-based Optima Shipbrokers.

The rate is 6.5 percent above the London-based Baltic Exchange's benchmark assessment of 51.66 points for a similar voyage. La Madrina is fitted with two steel hulls separating its cargo from the ocean and the exchange benchmark includes single- hull tankers that are cheaper to rent.

At 51.66 Worldscale points, owners of double-hulled very large crude carriers, or VLCCs, can earn about $18,653 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.

Bookings for VLCCs sailing from the Middle East to Asia account for 47 percent of global demand for the carriers, according to New York-based McQuilling Brokerage Partners LLP.

Shipments to the U.S. and Caribbean, the second-biggest market, account for 14 percent of demand for supertankers.

McQuilling Reports

Three excellent reports from McQuilling Services recently:

VLCC Counting Cycle [pdf]

Test Text blockquote

Asset Prices [pdf]

Test Text blockquote

The Economics of VLOCs [pdf]

Test Text blockquote

Imarex/SHX Closing Prices 09.10.07

Imarex
TD3: WS60 ( 0 ) - VLCC - Ras Tanura (Saudi Arabia) to Chiba (Japan), 260,000mt
TC2: WS180 ( -7.0 ) - MR2 - Rotterdam to New York (USAC)

SHX: 341.43 ( -6.61/-1.90% ) - PHLX Marine Shipping Index

Baltic Dirty Tanker Index: 765 ( -0.78%)
lowest since August 2003

OTII Rates	Sept. 10	Mon	4pm	prev day
From	To	Size	WS	change
AG	Singapore	260 K	55.00	0
AG	Japan	250 K	55.00	0
AG	USG	280 K	42.50	0
WAF	USG	260 K	50.00	0
WAF	USAC	130 K	75.00	0
Indonesia	Japan	80 K	115.00	+5

Imarex/SHX Closing Prices 09.10.07
Imarex, PHLX, SHX, WS, Worldscale, Baltic Dirty Tanker Index, BDTI, chart, graph

Imarex/SHX Closing Prices 09.04.07

Imarex
TD3: WS63 ( -1 ) - VLCC - Ras Tanura (Saudi Arabia) to Chiba (Japan), 260,000mt
TC2: WS177.5 ( -5.5 ) - MR2 - Rotterdam to New York (USAC)

SHX: 347.43 ( +1.63/-0.46% ) - PHLX Marine Shipping Index

Baltic Dirty Tanker Index: 804 ( -0.62%)
lowest since August 2003



OTII rates (Sep. 4th) [next available:
AG-Singapore - - - - - -260k - - - - WS 55.00
Indonesia-Japan - - - - 80k - - - - - WS 110.00
AG-USG - - - - - - - - - 280k - - - - WS 45.00
WAF - USG - - - - - - - 260k - - - - WS 55.00
WAF - USAC - - - - - - 130k - - - - -WS 75.00

Imarex/SHX Closing Prices 09.04.07
Imarex, PHLX, SHX, WS, Worldscale, Baltic Dirty Tanker Index, BDTI, chart, graph

Product Tanker Rates to Asia Decline

Hiring Rates for Oil Product Tankers on Asian Routes Decline
By Katherine Espina
Sept. 5 (Bloomberg)

Rates for chartering oil product tankers on Asian routes may extend declines after fuel inventories in Japan rose.

The rate for moving 30,000 metric tons of oil products to Japan from Singapore dropped 0.8 percent to Worldscale 219.17 yesterday, the third day it has fallen, according to the London- based Baltic Exchange. That translates to $18.93 for shipping a ton of product, Bloomberg data showed.

The rise in oil stockpiles in Japan, Asia's second-largest oil consumer, may weaken demand for vessels. Oil-product inventories in Japan rose to 15.2 million kiloliters (129.5 million barrels) last week from 15.1 million kiloliters a week earlier, the Petroleum Association of Japan said today. Gasoline inventory rose 28,322 kiloliters to 1.91 million kiloliters, the group said.

A potential reduction in gasoline exports from China may also keep a lid on tanker rates. China, Asia's largest gasoline exporter, may cut overseas sales of the fuel as state oil companies stockpile supplies to meet domestic demand for transport fuels, traders said last month.

With the end of the U.S. driving season, and ``Asian product shipments still fragile, product tanker demand could still be under pressure,'' DNB Nor Markets analysts Glenn Lodden and Henrik With said in a report. The Labor Day holiday weekend ended Sept. 3 in the U.S., after which gasoline consumption usually goes into a seasonal decline, easing demand for exports from other countries.

Only two ships capable of carrying 109,804 tons of cargo are slated to arrive in Singapore next week. Five vessels, able to transport 206,909 tons of oil products, are due this week, according to Bloomberg data.

Japan Rates

The cost of shipping 75,000 tons of products to Japan from the Persian Gulf declined a sixth day, losing 0.8 percent to Worldscale 153.96 yesterday, the Baltic Exchange's data showed.

The rate to transport a 55,000-ton cargo to Japan from the Middle East dropped 1.1 percent to Worldscale 176.54 yesterday, bringing to 9.2 percent its losses in the past six days, according to the Baltic Exchange. Shipping a ton of oil product on the route costs $30.87, Bloomberg data shows.

The rate to transport 80,000 tons of crude oil or fuel oil on so-called aframax tankers to Singapore from Kuwait rose a second day, adding 0.9 percent to Worldscale 123.65 yesterday, according to the Baltic Exchange.

Persian Gulf Oil-Tanker Rates May Fall

Persian Gulf Oil-Tanker Rates May Fall for Second Week on Glut
By Alaric Nightingale
Sept. 3 (Bloomberg)

The cost of shipping Middle East crude to Asia, the world's busiest market for supertankers, may fall for a second week as a glut of vessels forces owners to compete for cargoes.

There are about 100 very large crude carriers, or VLCCs, that can load at Middle East ports this month compared with 40 to 50 outstanding cargoes, according to a report today from Paris- based shipbroker Barry Rogliano Salles.

GS Caltex Corp., South Korea's second-biggest refiner, hired the vessel New Vitality at a rate of 57 Worldscale points, according to Barry Rogliano. That's 6.4 percent below the London- based Baltic Exchange's assessment for similar voyages of 60.91 points. The index dropped 7.6 percent last week.

New Vitality is fitted with one steel hull separating the crude it transports from the ocean. Such ships normally cost less to hire than the exchange's benchmark, which also takes into account modern double-hull tankers that cut the risk of an oil spill in the event of an accident.

Hurricane Felix, a category 5 storm that is forecast to hit Central America this week, so far hasn't buoyed demand for vessels, Nikos Varvaropoulos, a broker for Athens-based Optima Shipbrokers, said in an e-mailed note today.

Storms slow shipping operations, reducing vessel supply. It will take ``two to three weeks'' before any storm-related delays boost the tanker markets, Varvaropoulos said.

The number of tankers signaling that they are sailing toward U.S. ports fell by a third in the two weeks to Aug. 29, as refineries in the world's biggest oil-consuming nation undertake annual repair works.

At 60.91 Worldscale points, owners of double-hulled VLCCs can earn about $28,957 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.