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.