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.