World News
Tanker Rates Climb to Seven-Year High
A growing number of bookings and unloading delays of days or even weeks caused by a lack of space in on-land storage pushed up tanker rates last week to a seven-year high, Bloomberg reports.
Baltic Exchange data shows that day rates for ships with 2 million barrel capacities sailing the benchmark Saudi Arabia to Japan route rose to $111,359, reported to be the highest since July 2008.
Meanwhile, rates on the Worldscale pricing system for Saudi Arabia to Japan route are reported to have swelled 6.7 percent to 91.18 points, said to be the highest since at least the start of the year.
“When the market has been high and there is a thin balance of vessels available, even a small spark in activity can lead to a spike in rates,” said Eirik Haavaldsen, an analyst for Pareto Securities ASA.
Per Mansson, a London-based shipbroker for Affinity Shipping LLP, says that the rate surge can be partly attributed to increased shipments as part of the start of the winter season.
Those extra cargoes are said to be causing a decline in the number of available vessels, with loading over the next four weeks in the Persian Gulf set to see only 12 percent more tankers than cargoes, the smallest excess in seven weeks.
More vessels were also being commissioned as floating storage.
"We’ve seen the number of vessels for storage move higher," said Erik Nikolai Stavseth, a shipping analyst for Oslo-based Arctic Securities ASA.
"There have been several reports of congestion in Chinese ports,” he added, noting that the number of employed vessels has also been growing alongside growth in cargoes bound for the U.S. Gulf.
In November, tanker industry sources said that the hedging market for oil tanker freight this year has risen sharply to a total of about $4.5 billion, thanks in part to lower bunker prices that are said to be helping carriers' bottom lines and further contributing to speculative activity.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 504.50 | 2.50 | 620.00 | 3.00 |
| Rotterdam | 456.00 | 1.50 | 621.50 | 2.00 |
| Houston | 476.00 | 7.00 | 624.00 | 1.00 |
| Fujairah | 496.50 | 2.00 | 713.00 | 2.50 |
| Global 20 Ports Average | 526.50 | 0.50 | 712.00 | 0.50 |
| Global 4 Ports Average | 483.00 | 2.00 | 644.50 | 0.50 |
| Global Average Bunker Price | 570.50 | 1.50 | 751.00 | 1.00 |
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