OPEC spot fixtures increased in April by 10% to stand at 15.81 mb/d. The gain came mainly from the Middle East. Outside the Middle East, fixtures decreased by 2% in April. Compared to the previous month, global fixtures increased by 4% to stand at 21.55 mb/d. OPEC sailings declined 3% from the previous month to average 22.7 mb/d in April. Arrivals in Europe declined while arrivals in North America and the Far East increased. The increase in the Far East was supported by Japanese fuel demand.
Compared to the previous month, arrivals in North America and the Far East increased by 1% and 4% to stand at 8.73 mb/d and 4.37 mb/d. Arrivals in Europe declined by 6% to stand 11.28 mb/d over the same period.
In April, crude oil tanker market sentiment weakened and average spot freight rates closed down 17% compared to the previous month. For the VLCC sector, average spot freight rates for reported routes decline 19% in April compared to the previous month, while Suezmax dropped 24% and Aframax fell 10%. The overall weakness in spot freight rates in April can be attributed to tonnage oversupply and weak demand due to lower activities, both East and West of the Suez.
The weak demand for tonnage was driven by refinery maintenance, lower demand in the Far East as well as the holiday. In contrast, average spot freight rates on the clean market closed up by 7% in April compared to the previous month, with East of Suez rates registering a healthy gain of 16% and West of Suez increasing 5%. Higher petroleum product trade, especially in Asia, supported clean rates in April.
For VLCCs, Middle East to East spot freight rates declined 19%, Middle East to West decreased 11% and West Africa to East dropped 23% in April compared to the previous month. Spot freight rates for VLCCs loading from the Middle East declined on the back of lower Chinese lifts, refining maintenance in India and lower tonnage demand from Japan as refining capacity has remained shut in since the earthquake. Additionally, lower floating storage capacity further increased availability and pressured spot freight rates in April. For Western destinations, VLCC spot freight rates were further influenced by the lower tonnage demand to North West Europe as market participants were off for the Easter holiday.
Suezmax spot freight rates followed a similar pattern to those of VLCCs. West Africa to the US spot freight rates lost ground, declining 25%, and Northwest Europe (NWE) to the US decreased 24% in April compared to the month before. The decline of Suezmax spot freight rates for deliveries from West Africa to the US was due to lower transatlantic activities backed by the slow return of refineries from turnaround, shutdowns of refineries in the US, as well as lower crude oil lifting from the North Sea as production declined.
Aframax spot freight rates closed down on average by 10% in April compared to the previous month with spot freight rates on all selected routes losing ground except the Indonesia to East route. The gain of Indonesia to East Aframax spot freight rates was partially due to higher fuel oil demand from Japan as many electricity plants and refineries require fuel oil for direct burning to compensate for closed nuclear capacity. In the Mediterranean, Aframax spot freight rates experienced deep declines with Mediterranean to Mediterranean rates losing 25% and Mediterranean to Northwest Europe declining 19% in April compared to the previous month.
The decline of spot freight rates in both routes can be attributed to lower activities of trades due to political tension in North Africa. Caribbean to the US Aframax spot freight rates registered a 7% decline in April compared to the previous month, on the back of shut-downs of refineries in the US.
Sentiments in the clean tanker market were bullish and spot freight rates on all reported routes increased in April compared to a month earlier. East of Suez clean spot freight rates registered healthy growth of 16% and West of Suez edged higher by 5% in April compared to last month.
East of Suez, the Middle East to East clean spot freight rates gained 13% and Singapore to East registered growth of 19% in April over the previous month. The gains on spot freight rates on both routes in April were due partially to higher demand for petroleum products in Japan to relieve the shortage created by the outage in refinery capacity following the earthquake.
West of Suez clean spot freight rates gained 5% on average in April compared to the previous month. In West of Suez, Caribbean to the US clean spot freight rates increased 4%, while from NWE to the US, rates edged 6% higher. Improved gasoline imports in the US, with the approaching driving season, along with open arbitrage, supported rates. In the Mediterranean, clean spot freight rates for inter-Mediterranean voyages increased by 5%, while from the Mediterranean to NWE rates gained 4% in April over the previous month. The increase was supported by higher gasoline trade in preparation for the US driving season.