Tanker Market - Mar 13

Source: OPEC_RP130309 3/12/2013, Location: Europe

According to preliminary data, global spot fixtures decreased in February by 0.44 mb/d from the previous month to average 16.18 mb/d. This decline occurred mainly as a result of fewer fixtures seen from the Middle East-to-East, which declined by 13.5% from last month. OPEC spot fixtures dropped as well, by 0.37 mb/d to average 11.92 mb/d. In an annual comparison, both global and OPEC fixtures were higher than last year, by 2.4% and 1.3%, respectively.

OPEC sailings, as per preliminary data, remained almost steady in February from a month earlier, decreasing by a slight 0.03 mb/d and averaging 23.59 mb/d. Compared with the same month a year ago, they were 1% higher. Meanwhile, sailings from the Middle East were down by 0.1% from last month and 4% from a year ago. Crude oil arrivals in Europe and West Asia increased by 0.41 mb/d each in February from January, to average 12.10 mb/d and 4.74 mb/d, respectively. Arrivals in the North American ports and the Far East declined by 1.21 mb/d and 0.53 mb/d to average 8.48 mb/d and 8.2 mb/d.

Crude oil tanker market sentiment continued to weaken in February across different vessel segments. The declining trend was seen particularly on VLCCs and Suezmax, as dirty spot freight rates on all reported routes for these classes were down in February from a month earlier; meanwhile, Aframax saw the only exception in the dirty segment. Clean spot freight rates also experienced declines on all reported routes, except on the Mediterranean-to-Northwest Europe and Northwest Europe-to-the US. The continuous tonnage over-supply situation, the holiday season in the east and limited delays in the Turkish straits kept putting pressure on spot freight rates.

The VLCC class saw a slow month in general with low levels of activity, despite a preholiday rush which did not reflect any gain in freight rates. Owners tried to show some resistance to the prevailing rates; yet their attempts did not come to anything, since the market was under the influence of tonnage over-supply and a lengthy positions list, and these gave the charterers enough alternatives to choose from. Average spot freight rates for VLCCs declined by 15.5% in February from the previous month to average WS29 points. This decline was mainly the result of a drop in VLCC rates on all reported routes. Freight rates for tankers operating on the Middle East-to-East route declined by 15.4% to average WS33 points, while the drop on the Middle East-to-West route was larger at 20%, averaging WS20 points. Rates reported for tankers trading on the West Africa-to-East route declined by 13% to average WS34 points.

Suezmax spot freight rates followed the same trend as VLCCs in February. On average, Suezmax rates declined by 11.5% from the previous month to average 50WS points. The rates dropped despite the Suezmax market being busy in several regions with an increased amount of activity. Yet this was not reflected in an increase in freight rates, since an over-supply of vessels prevented rates from registering any gains. Tankers operating on the West Africa-to-the US route decreased by 5.4% to average WS53 points. Rates on the Northwest Europe-to-the US route fell by 17.5% in February from the previous month to average WS47 points. In an annual comparison, freight rates on both routes fell by 30% and 32%, respectively. Competition from a VLCC loading based on a 1 mb part-cargo had a further influence on Suezmax availability and put pressure on rates in February.

Aframax was the only class in the dirty sector which saw some gains in freight rates in February. On average, Aframax spot freight rates increased by 5% in February from the previous month. This was partially supported by higher activity and fuel oil tonnage requirements. Mediterranean-to-Mediterranean and Mediterranean-to-Northwest Europe Aframax rates rose by 6% and 5%, respectively, to average WS85 points for each. These increases occurred on the back of tighter vessel availability, especially for prompt loadings. The freight rate increase in the Mediterranean would have been higher if they had not been dragged down by the severe competition between tanker-owners. The rates between the Caribbean and the US East Coast saw the biggest increases on all the other reported routes. These rose by 13% from a month ago, as a result of a tightening position list, bad weather and delays in the Caribbean and USGC. The Indonesia-to-East route dropped by 6% in March from the month before to average WS75 points.

In the clean tanker market, spot freight rates were mixed in February. Average rates decreased by 7.3% East of Suez and yet increased by 1% West of Suez. Generally, the clean tanker market had a slow start in February before it firmed moderately for some routes towards the middle of the month as activity increased, and the position list thinned for medium- and long-range vessels. Rates for tankers operating on the Middle East-to-East route decreased by 8.3%, while they declined on the Singapore-to-East route by 6.6%. West of Suez, rates experienced some gains for both the Mediterranean-to-Northwest Europe route and the Northwest Europe-to-the US route, increasing by 1% and 3%, respectively, from the previous month. However, Mediterranean-to-Mediterranean rates declined by a slight 1%. It is worth highlighting that, in an annual comparison, all reported clean freight rates were found to be higher than a year earlier.

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Related Articles: General  LNG Carriers  LNG Terminal  Natural Gas Storage  Oil and Gas Pipeline  Oil Storage  Railways  Tank Truck  Tankers 

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