Tanker Market - JAN 12

Source: OPEC_RP120109 1/16/2012, Location: Europe

In December, OPEC spot fixtures remained relatively steady from the previous month, averaging 11.76 mb/d, according to preliminary data. The balanced spot fixtures were attributed mainly to the 2% gain in spot fixtures from the Middle East-to-Eastern destinations, which offset the 4% decline in Middle East-to-Western ports. On an annual basis, OPEC spot fixtures dropped 19% in December, while Middle East-to-East fixtures increased by 2%. OPEC sailings increased by 0.31 mb/d or 1.3% in December from the previous month to stand at 23.43 mb/d, supported mainly by an increase in Middle East-to-East liftings. In December, Middle East sailings gained 2.7% to stand at 13.19 mb/b. Compared with the same month last year, OPEC sailings declined slightly by 0.7%, while Middle East sailings increased by 3.5% in December.

Oil arrivals increased in December, compared with the previous month, in both North America and West Asia, by 2.4% and 2.4% respectively, to stand at 8.79 mb/d and 4.62 mb/d, according to preliminary data. However, arrivals in Europe and the Far East showed slight declines in December, according to preliminary data. Despite flat VLCC spot freight rates in December, compared with the previous month, the average crude spot freight rate for all reported routes gained 17%, supported by 32% for Aframax and 9% for Suezmax. East and West healthy liftings of cargoes, as well as Turkish delays, supported the gains in dirty tanker market sentiment. On the clean tanker market, West of Suez spot freight rates gained 22% in December, supported by the naphtha trade, while East of Suez rates remained steady. On an annual basis, dirty tanker spot freight rates declined, while clean tanker rates remained steady.

VLCC spot freight rates remained flat in December from the previous month, due to balanced steady activity in the reported routes. The rates for VLCCs operating on the Middle East-to-East route remained flat in December, as a result of balanced tonnage supply and demand. Westbound route rates declined by 5% in December, as a result of sufficient tonnage in the market and lower enquiries. However, rates for long-haul routes from West Africa to the East gained 5% in December. The gains were supported by higher Chinese requirements from West Africa, as well as from Latin America and that Caribbean, that absorbed the available tonnage. Different sentiment prevailed in the Suezmax market, as spot freight rates increased by 10% in December, compared with the previous month. On the West Africa-to-US route, rates gained 12% in December.

The increases were supported mainly by increasing tonnage demand and bullish sentiment in the market before the Christmas holiday. The same factors prevailed on the Northwest Europe-to-US route, supported additionally by the weather conditions. There rates increased by 7% in December, compared with the month before. Developments with Aframax spot freight rates were very healthy in December, experiencing increases on different routes. In the West, Mediterranean-to- Mediterranean rates rose by 64% and Mediterranean-to-Northwest Europe were up by 63% in December, compared with the previous month, due mainly to Turkish Strait delays of around seven days and higher exports from the Black Sea. For the Caribbean-to-the US, rates increased by 7% in December, in support of delays caused by the Gulf of Mexico weather conditions. East of Suez, the Indonesia-to-East rates gained 3% in December over the previous month, due to higher trade. Compared with a year ago, VLCC spot freight on selected routes remained almost at the same level, while Suezmax and Aframax gained ground in both spot rates and transportation costs/b.

Clean tanker spot freight rates gained some ground in December, supported mainly by increasing tonnage demand ahead of the Christmas holiday, tonnage availability and weather conditions. The West of Suez rates increased on all reported routes in December, compared with the previous month. The Mediterranean tanker market showed the strongest gains in December. Mediterranean-to-Mediterranean clean spot freight rates gained 32% and the Mediterranean-to Northwest Europe rates increased by 31% in December from the previous month. Rates were supported by delays in the Turkish Strait and bad weather conditions in the Mediterranean area. Both the Caribbean-to-US and Northwest Europeto- US rates registered gains of 4% and 25% respectively, as a result of healthy diesel demand from Latin America and gasoline demand from Europe ahead of the Christmas holiday and weather conditions in the Gulf of Mexico.

In the East, clean tanker spot freight rates from the Middle East to the East gained 3% and from Singapore to the East declined by 1.3% in December, compared with the previous month. The Middle East-to-East gains were supported by the higher naphtha trade resulting from firm demand from South Korea together with petrochemical activity, while balanced trading activity kept the Singapore-to-East rates nearly flat. Compared with a year ago, West of Suez clean spot freight rates gained ground, supported mainly by the Caribbean market, while East of Suez rates \ remained flat.


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