Gulf VLCC rates to Asia tick up after surge

LONDON — Core crude oil freight rates from the Gulf ended the week stronger after surging by at least 10 points in the previous session on strong August demand and high bunker fuel prices, shipping brokers said on Friday.

By (Reuters)

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Published: Sun 10 Jul 2005, 10:31 AM

Last updated: Thu 2 Apr 2015, 4:38 PM

They said typical Very Large Crude Carrier (VLCC) journeys to short-haul Singapore rose another four points to W95.

Voyages to Japan for similar loads were up close to five points to around W92.50. Benchmark rates to Asia have been slowly recovering from 20-month lows hit in late June.

Brokers were unsure why Asian destinations had surged on Thursday, while journeys to the United States and Europe had held near steady.

“Bunker prices in the Gulf are playing into this, but they certainly don’t explain all the climb,” one said.

VLCC rates to the U.S. Gulf climbed by a point to W67 on Friday. Rates to the United States have similarly been steadily tracking higher after hitting a 20month low of W50 on June 17 according to Reuters data.

“For a third consecutive week the VLCC market has experienced firming rates and strong activity,” P.F.Bassoe ship brokers said in a report. “A combination of late July and early August cargoes being fixed this week reflects that charterers are more concerned over the tonnage availability compared with previous months,” it said.

It said availability remained tight over the next 30 days especially for double-hulled vessels.

Smaller aframax loads from the Gulf to Singapore also jumped, brokers said. Typical 70,000 tonne cargoes rose at least eight points to W164.50 echoing the higher trend.

Crude oil freight rates from West Africa were little changed on VLCCs but sank lower on suezmax shipments.

VLCCs trading to the United States were steady at W83 amid steady demand, brokers said.

Million barrel ships, 130,000 tonne suezmax loads fell another eight points to W100 after sliding some seven points on Thursday.

Other key exporting regions also gave some ground.

In the Mediterranean, suexmaxes out of the Black Sea delivering crude to Med refiners fell two points to W103 after slumping some 13 points on Thursday.

Smaller aframax tankers trading across the Mediterranean closed at down three points at W178.

Across the Atlantic 70,000 tonne aframax tankers shipping crude oil from the Caribbean to the U.S. Gulf were flat to a touch lower at W176.

The Baltic Exchange’s crude oil freight tanker index fell three points to 1,189.

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