Strong Middle East market fails to lift VLCC rates

Catogory : Announcements

A SOLID week of chartering demand has failed to lift to spot very large crude carrier rates, which continued their downward spiral on the back of excess tonnage.

This underscores the extent of oversupply that is weighing on VLCC markets and signals what could be an extended downturn for the sector, as the seasonal uptick in winter markets becomes uncertain.

And if oil market demand were to contract for some reason, there is no telling how tanker rates could fare.

The benchmark VLCC time charter equivalent on the Baltic Exchange fell into negative territory last week to minus $1,385 per day on Monday’s close from $984 per day a week earlier. The TD3 route from Ras Tanura to Chiba fell to $7,934 per day from $8,987 per day.

Going west, rates for 280,000 dwt vessels to the US Gulf have also come under downward pressure, falling around two Worldscale points to W20-W21 as owners look to position their ships for the more attractive and lucrative Caribs-East trade, the Baltic Exchange said.

It said Caribs-east coast of India was fixed at $2.75m while an east coast of Mexico to South Korea run went at $4.9m, while in the North Sea, a Hound Point to South Korea fixture was done at $4.05m.