World News
VLCC Rates Falling as Floating Storage Demand Wanes
Demand for floating oil storage is falling following an uptick in oil prices, leading to a decline in very large crude carrier (VLCC) rates, Platts reports.
The downward correction has been much larger than expected, a Singapore VLCC broker noted.
By mid last month oil traders were said to have hired up to 20 tankers to store crude oil at sea, which at the time had risen to 40 million barrels (bbl) from 25 million bbl in the previous week.
According to the latest report, in January a total of 24 VLCCs were taken on time charter with the option to be used as storage.
However many of them are still available in the market, with others being put into tanker pools for spot voyages.
"Floating storage is turning out to be a big disappointment for owners," a VLCC broker in New Delhi said.
Despite the fall in rates, one source said owners still stand to make a profit thanks to low bunker prices in the latter half of last year.
Last month it was reported that as oil prices dipped, VLCC rates doubled from mid-October levels to between $55,000-$60,000 per day.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 645.00 | 2.00 | 767.50 | 11.50 |
| Rotterdam | 600.00 | 8.00 | 751.50 | 13.00 |
| Houston | 627.50 | 9.00 | 796.00 | 11.50 |
| Fujairah | 649.50 | 0.00 | 889.00 | 0.50 |
| Global 20 Ports Average | 665.00 | 0.50 | 864.00 | 6.50 |
| Global 4 Ports Average | 630.50 | 5.00 | 801.00 | 9.00 |
| Global Average Bunker Price | 722.50 | 2.50 | 922.50 | 3.00 |
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