Global oil fixtures increased by 4% im May to stand at 19.34 mb/b, supported mainly by OPEC fixtures, which increased by 12% from the month before to reach 11.65 mb/d. The increase in OPEC fixtures was driven by westbound fixtures, mainly on the return of refineries from maintenance. Preliminary estimates showed that OPEC sailings remained almost flat in May, to stand at 24.12 mb/b. Compared with the same period a year ago, OPEC sailings increased by 6% in May. According to preliminary data, arrivals at the main importing regions showed mixed patterns in May. North America and Far East arrivals gained by 11% and 2% respectively, while Europe arrivals declined by a slight 1% and West Asia arrivals remained steady in May from April. Compared with the same month last year, North America arrivals remained flat, while whole those from the Far East and Europe increased.
Tanker market sentiment for dirty and clean vessels showed a mixed pattern in May, compared with the previous month. In the dirty market, average spot freight rates for VLCCs dropped by 8%, while average spot freight rates for Suezmax and Aframax gained 8% and 1% respectively. In the clean market, East and West of Suez average spot freight rates declined by 2%. VLCC spot freight rates on all reported routes declined in May from the previous month, with Middle East-to East rates experiencing the largest drop of 12% to average WS57 points. This decline, the first since February, was driven mainly by excess tonnage availability, as a result of lower liftings for South Korea, India and China. Rates for the Middle East-to-West and West Africa-to-East routes decreased by 5% and 6% in May to average WS41 and WS60 points respectively. Tonnage over supply, lower liftings of African crude by Asian buyers and different holidays during the month were behind the declines.
Suezmax average spot freight rates gained 8% in May to stand at WS72 points. Rates for Suezmax operating on the West Africa-to-US Gulf route increased by 16% to WS78 points, while rates from NW Europe to the US declined by 2% to WS66 points. The healthy gain in rates from West Africa to the US came mainly on the back of the high requirement for West African crude by US refiners, while the drop in NW Europe-to-US rates was partially driven by lower UK and North Sea crude oil liftings. Aframax spot freight rates declined on all reported routes in May, with the exception of the Caribbean-to-the US route, where they increased by 20% to stand at WS117 points. The decline came from the Mediterranean market, where Mediterranean-to- Mediterranean and Mediterranean-to-Northwest Europe rates dropped by 7% and 6% to average WS87 points and WS88 points respectively. The healthy gain in rates from the Caribbean to the US was supported by Latina America’s increased exports, mainly from Brazil, while the declines in both Mediterranean-to-Mediterranean and Mediterranean-to-Northwest Europe rates were driven mainly by tonnage availability, an improvement in weather-related delays in the Turkish strait and reduced tonnage requirements from some refiners in Europe. Rates on the Indonesia to-East route declined by 5% in May to average WS84 points. This decline came on the back of lower trade in the regions, since many refineries were shut down for maintenance.
Clean tanker market sentiment was bearish in May, compared with the previous month, as East of-Suez average spot freight rates decreased by 2.4% to WS120 points and West-of-Suez rates dropped by 2.3% to WS146 points. East of Suez, Middle East-to- East rates declined by 4% to WS114 points, partially on the back of lower naphtha and jet fuel activity. However, Singapore-to East rates remained flat at WS126 points in May, due to a balanced tonnage position.
West of Suez, Caribbean-to-US clean spot freight rates declined by 13% in May from April to stand at WS152 points, while Northwest Europe-to-US, Mediterranean-to- Mediterranean and Mediterranean-to-NW Europe rates gained 2% to stand at WS 142, WS140 and WS150 points respectively. Open arbitrage supported the gains in the NW Europe-to-US rates, while increased product requirements from North Africa and open arbitrage with Asian buyers supported overall Mediterranean clean rates.