|
The
supply of supertankers competing to ship Middle
East oil shrank for a second week after an
unexpected increase in demand last week for
vessels to collect the region's oil.
There
are 20 per cent more very large crude carriers,
or VLCCs, for hire over the next 30 days than
there are cargoes, the median estimate of three
shipbrokers, two shipowners, and one derivatives
broker surveyed by Bloomberg News yesterday
showed.
Last week, the surplus fell two percentage
points to 28 per cent.
The past week saw 'more enquiries for May than
I'd thought', helping to lower fleet supply and
boost rental rates, Halvor Ellefsen, a
shipbroker at SeaLeague A/S in Oslo, said by
e-mail yesterday.
The Organization of Petroleum Exporting
Countries, which agreed to cut production three
times since last year, said on May 13 that
members increased output for the first time in
April since July last year.
The price of crude oil has advanced as much as
28 per cent this year in Europe, boosting
revenue for Opec members who don't follow the
group's agreed output cuts.
Oil companies hired 17 VLCCs last week to load
at Persian Gulf ports, according to data
compiled by Bloomberg from shipbrokers including
Simpson, Spence & Young Ltd.
In the second full week in April, they booked 14
such vessels.
Demand normally slows in the second week of most
months because of how shipping programmes are
organised, Mr Ellefsen said.
Of the bookings arranged last week, 14 were to
go to Asia, two to the Gulf of Mexico, and one
to Canada.
Out of last month's 14 deals, 11 were hired by
Asian buyers, two were to unspecified
destinations, and one was for the US West coast.
To judge supply and demand, brokers have to
estimate how many cargoes oil companies have and
what ships are likely to return to the region,
having made prior deliveries.
Some oil companies don't widely advertise how
many shipments they need to arrange as this can
be commercially valuable information. The same
goes for shipowners and their
fleets.
Supertanker rental rates on the benchmark Saudi
Arabia to Japan route advanced 7 per cent to
28.72 Worldscale points last week, according to
data from the London-based Baltic Exchange.
They had dropped to the lowest in at least 11
years, based on the industry-standard Worldscale
price system.
Worldscale points are a percentage of a nominal
rate, or flat rate, for more than 320,000
specific routes. Flat rates for every voyage,
quoted in US dollars a ton, are revised annually
by
the Worldscale Association in London to reflect
changing fuel costs, port tariffs and exchange
rates.
Each flat rate assessment gives owners and oil
companies a starting point for negotiating hire
rates without having to calculate the value of
each deal from scratch.
A rate of 28.72 points works out at US$7,390 a
day, according to the Baltic Exchange.
Frontline Ltd, the biggest operator of VLCCs,
needs US$32,100 a day to break even on each of
its supertankers once interest repayments are
taken into account.
Source: Bloomberg
|
