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Oil tanker rates double as demand for storage and transport resurfaces

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Published: Mon 30 Mar 2020, 5:13 PM

Last updated: Mon 30 Mar 2020, 7:19 PM

Supertanker freight rates are on the rise for a second time this month as producers, refiners and traders scramble to secure ships to transport crude or store a fast-growing global glut of oil, industry sources said.
Freight rates for very large crude-oil carriers (VLCC) along the Middle East Gulf to China route were assessed at about $180,000 a day on Monday, up from some $125,000 on Friday and a weekly low of about $90,000 a day on Wednesday, according to several ship broking sources.
"Its difficult to say whether or not the rates will be sustained, or at what levels, but generally looking at Saudi's export plans for the coming months at more than 10 million barrels per day (bpd) - as well as the demand for floating storage - then you can expect freight rates to remain strong," said Anoop Singh, head of tanker research in Asia at Braemar ACM Shipbroking.
"But how strong is the question," said Singh, adding that forward prices for VLCCs for the second quarter were trading at some $170,000 a day for the Middle East to China route.
With world demand for oil forecast to plunge 15 million to 20 million bpd, a 20 per cent drop from last year, traders are increasingly being forced to park crude in storage to take advantage of a record gap between spot and future prices.
- Reuters

By Roslan Khasawneh

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