OPEC spot fixtures increased by 5% in October to average 11.8 mb/d, up from 11.23 mb/d in September, as per preliminary data. The increase is attributed to higher fixtures from the Middle East, which increased by 0.38 mb/d to average 6.02 mb/d. Fixtures from outside the Middle East also exhibited a small gain of 0.13 mb/d, or 3.2%, compared with the previous month. On a y-o-y basis, OPEC spot fixtures in October were 6% lower. Sailings from OPEC were relatively steady at 22.54 mb/d, compared with 22.66 mb/d in the previous month, yet 2% lower than a year earlier. Middle East sailings stood at 17.7 mb/d, up from 17.36 mb/d in September and 4% higher than a year earlier. Crude oil arrivals in Europe and the Far East gained 50 tb/d and 0.34 mb/d to stand at 12.36 mb/d and 8.49 mb/d, respectively. North America and West Asia arrivals decreased by 0.17 mb/d and 0.15 mb/d to stand at 8.51 mb/d and 4.52 mb/d, respectively.
Both crude and product spot freight rates registered gains in October, compared with the previous month. After a steady decline over the last five months, dirty tanker freight rates rebounded in October, on the back of higher West African crude oil lifting, increased tonnage demand for Far East destinations, a return of Mediterranean activities and increased delay days in the Turkish straits. The modest gain in West of Suez clean spot freight rates was attributed mainly to North African product demand, delays in the Turkish straits and higher Caribbean/US Gulf Coast product trades, while the weakness in Eastern rates was attributed mainly to tonnage availability.
In the dirty market, VLCC spot freight rates gained 5% on average in October, compared with last month, to stand at WS43 points, yet remained below the rate of the same period a year ago. VLCC West Africa/East spot freight rates showed the strongest gain of 11% in October to stand at WS49 points, and Middle East-to-East destinations exhibited a modest gain of 5% in October to stand at WS43 points, compared with the previous month. The modest gain in Middle East-to-East VLCC spot freight rates was supported by the increase in Far East requirements, while the spillover effect from the Suezmax rates in West Africa strongly supported the gains in West Africa-to-East VLCC rates. VLCC spot freight rates on the Middle East-to-West route were weak in October and closed down by 3%. On average, VLCC spot freight rates gained 5% in October, compared with the previous month, yet the minor gain was not enough to support ship-owners’ margins as bunker fuel prices remained high, leavin ship-owners struggling to cover breakeven costs.
Suezmax spot freight rates showed the strongest gains in the dirty market by closing up 37% on average in October, compared with the previous month, to stand at WS84 points. The rate increase marks the highest in Suezmax freight rates since March 2011. Suezmax spot freight rates for tankers operating the West Africa-to-US route increased by 31% in October to stand at WS89 points, and rates on the Northwest Europe-to-US route gained 44% to stand at WS78 points. Increased tonnage demand to the US, from both West Africa and Northwest Europe, on the back of seasonal demand, strongly supported the rates.
The Aframax market followed the same pattern as the Suezmax. Spot freight rates for Aframax with Mediterranean-to-Mediterranean and Mediterranean-to-Northwest Europe routes registered the strongest gains on all reported routes. Compared with last month, Mediterranean/Mediterranean Aframax spot freight rates increased by 54% in October to stand at WS134 points, and Mediterranean-to-Northwest Europe gained 52% to stand at WS134 points. October Aframax spot freight rates marked the highest rates since early 2010. The healthy increase also impacted Aframax spot freight rates on the Caribbean-to-US and Indonesia-to-East routes to close up by 9% and 3% in October, to stand at WS100 and WS94 points, respectively.
Clean tanker spot freight rates gained 4% on average in October, compared with the previous month. In line with the crude tanker market, most of the support came from the much firmer West of Suez market, mainly the Mediterranean and Caribbean, while East of Suez rates remained weak. Clean spot freight rates on the Mediterranean-to-Mediterranean and Mediterranean-to- Northwest Europe routes increased by 10% and 7% respectively in October. The increase was supported by strong North African product imports and four to five delays in the Turkish straits.
Higher US gasoline exports to Latin America supported the 12% gain in spot freight rates on the Caribbean-to-US route. Clean spot freight rates remained weak on the Middle East-to East and Singapore-to-East routes, as high tonnage availability and a lower product trade put pressure on the rates. Compared with the previous month, clean spot freight rates on the Middle East-to-East and Singaporeto- East routes declined by 15% and 1.3% in October to stand at WS115 and WS151 points respectively.