SeaNews Turkey
Home FAQ RSS Links Site Map Contact Wednesday, 22.Oct.2014, 23:52 (GMT)
All News
INTERVIEW
TURKISH STRAITS
SEANEWS MAGAZINE
COLUMNISTS
WORLD SHIPPING
PORTS
SHIPPING NEWS
   » ENERGY
   » CONTAINER
   » CRUISE NEWS
   » SAFETY&SECURITY
   » Environmental
   » Towage & Salvage
   » NAVY NEWS
   » Fishing
   » TANKERS
   » DRY BULK
SHIPBUILDING
ACCIDENTS
PILOTAGE&TOWAGE
MARKETS
LOGISTICS
SHIP RECYCLING
IMO&EU NEWS
PIRACY
TURKISH PRESS REVIEW
SEA SPORTS
NEWS FROM TURKEY
INSIGHT/OPINION
SHIPBROKER REPORTS
OFFSHORE
GUEST COLUMNIST
MARITIME RSS
Poll
Will freight markets ever return pre-crisis levels?
Yes, in 2014
Yes, in 2015
Yes, after 2015
No, never!
Who knows?


 
SHIPPING NEWS » TANKERS

Crude oil tanker rates below levels to cover voyage costs
Crude oil tanker rates below levels to cover voyage costs


Crude oil tanker rates on the major Middle East route fell on Monday back below levels that allow operators to cover fuel and other variable voyage cost. Tuesday, 16.Aug.2011, 19:19 (GMT)

Crude oil tanker rates on the major Middle East route fell on Monday back below levels that allow operators to cover fuel and other variable voyage costs as a glut of ships put pressure on the market despite a fall in bunker fuel costs.

The world's benchmark VLCC export TD3 route from the Middle East Gulf (MEG) to Japan DFRT-ME-JAP slipped to W45.31 in the Worldscale measure of freight rates, or -$801 a day when translated into average earnings, from W45.91 or $167 a day on Friday and W46.09 or -$110 a day last Monday.

Average earnings are calculated less costs including bunker fuel and port fees.

"Rates will likely remain under pressure on the benchmark TD3 route in the near term as the August cargo program comes to a close and the forward position list remains bloated at 91 vessels," Deutsche Bank said on Monday.

"Currently in the (MEG), the August cargo program has three vessels for every one cargo, and September cargoes have been slow to hit the market."

Rates turned negative for the first time on Aug. 1 since the Baltic Exchange started collating earnings equivalent data in 2008. They stayed negative for seven sessions before moving back into positive territory.

VLCC operating costs including fixed costs are estimated at around the $10,000 a day level.

"Although the MEG VLCC market was active last week, the rate action was relatively uneventful ... Based upon the lower bunker prices, daily returns for owners were effectively the same," said broker SSY.

"Ships are expected to disappear slowly from position lists, with no great change in rates, with oil prices likely to be the driver behind any changes. September stems may start to appear in the coming days, but there is ample supply to cover them."

Frontline , the world's largest independent tanker operator, said this month it was pulling some of its largest crude oil carriers from the market to limit its losses.

Average VLCC earnings had pushed above $10,000 a day from June 8 before dropping again below the key level on June 27. They have remained below $10,000 a day since then and have been negative since Aug. 1.

Prior to the move higher in June, VLCC rates had hovered for several weeks around or below operating costs, estimated around the $10,000 a day level, as the market had struggled with growing tanker availability despite healthy crude oil demand.

VLCC rates have been volatile in recent months due to a supply overhang caused in part by the end of a trading play, which led to storage of millions of barrels of crude oil on tankers at sea.

VLCC rates from the Gulf to the United States DFRT-ME-USG were at W35.08 from W35.14 on Friday and W37.00 last Monday. VLCC rates from West Africa to the U.S. Gulf were at W47.00 from W47.07 on Friday and W47.39 last Monday.

AFRAMAX, SUEZMAX

Cross-Mediterranean aframax tanker rates reached W89.18 from W88.63 on Friday and W88.13 last Monday.

"The aframax sector is also fundamentally oversupplied with tonnage, particular in the Mediterranean and Baltic Sea," Cantor Fitzgerald said.
In recent weeks the aframax Med market has been hit by turmoil in Libya, which has reduced demand for tankers. Conflict in Syria has also contributed to the flat to weak market tone.

Rates for suezmax tankers on the Black Sea to Med route to reached W72.08 from W71.15 on Friday and W72.69 last Monday.

"The area is still oversupplied with tonnage, in our opinion, and the increase in rates was likely more driven by lower bunker fuel prices instead of an improving demand dynamic, we suggest," Cantor Fitzgerald said, referring to the suezmax market.
REUTERS

Read: 11488 Times- Crude Oil, Tankers, Rates, -


Rating (Votes: 2 . Average: 1/5)
Add your comment(Existing: 0)  Tell friend  Print

COMMENTS ( 0 Existing)

Related Articles:







Events
October 2014
Su Mo Tu We Th Fr Sa
      1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31  
 

COLUMNISTS
MOST READ TODAY
Lloyd's Register says 24,000 TEU ships will soon be ply trade lanes- 470
Platts: Freight Rates Pressured by Falling Bunker Fuel Prices- 351
Disabled Russian Box Ship "Simushir" Reaches Prince Rupert- 318
MEPC Approves Draft Polar Code- 316
Ports worldwide restrict ship entry from Ebola hit countries- 212
2nd quay crane comes to NZ's most southerly box port as volume rises- 202
CSAV buys slots on G6 services ahead of merger with Hapag Lloyd- 201
India has until today to back Bali deal before it likely dissolves- 175
MOL offers new REX link to boost Far East-Jeddah services- 163
Ending ship pollution fund too soon risks damaging litigation: ICS- 161

E-MAGAZINE
SeaNews June
October Issue
SeaNews June
September Issue
SeaNews June
July/August Issue
SeaNews June
June Issue
SeaNews June
May Issue

News in Pictures


Model Alexandra Fotopoulou holding the 9th issue of seanews magazine at the Posidonia Shipping Fair


Hot News
US claims of surpassing Saudi oil production will prove hollow: expert
TEN Positive About Tanker Market Conditions TEN Positive About Tanker Market Conditions
Kurdish attempts to sell oil are not going to get support from the Obama administration
Surging Middle East Oil Refining Increases Tanker Rates
Lack of demand to keep chemical tanker market depressed: Stolt-Nielsen

 
Archive Search