Gulf Oil and Gas accountACCOUNT

Tanker Market - June 14

Source: OPEC_RP140609 6/12/2014, Location: Europe

In May, crude oil tanker market sentiment remained weak, while dirty average spot freight rates dropped by 2% compared with the previous month. The drop came mainly because of a 10% decline in VLCC sector average spot freight rates for all reported routes in May compared with the previous month. Suezmax and Aframax freight rates remained stable at the same levels as registered a month earlier. Several factors supported the general weakness in spot freight rates in May, though holidays at the beginning of the month had a strong impact. A low number of tonnage demand fixtures supported tonnage oversupply in both East and West of Suez, as did incomplete refinery maintenance. In general, May was found to be light on deals, despite a return from refinery maintenance. Clean tanker sentiment was mixed in May; while freight rates increased in East of Suez by 5% from a month ago, they dropped by 9% in West of Suez. Low activity, limited tonnage demand and holidays were the main factors driving the drop in the West of Suez clean tanker market.

Spot fixtures
In May, OPEC spot fixtures declined by 0.95 mb/d or 7.6% compared with the previous month to stand at 11.58 mb/d. The number of fixtures in May were on the low side as tonnage demand was down, partially due to seasonal maintenance. All chartering activities showed a drop from both the previous month and one year earlier. The Middle East-to-East and Middle East-to-West routes experienced a drop of 8% and 7%, respectively, while outside the Middle East fixtures declined by 7%. On the whole, global oil spot fixtures were down in May by 1.29 mb/d to 16.8 mb/d compared with the previous month.

Sailings and arrivals
OPEC sailings dropped by 0.40 mb/d or 2% in May on a monthly basis and an annual comparison reflected a similar drop, also in terms of percentage. According to preliminary data, arrivals at the main importing regions showed an increase from a month earlier, with the exception of West Asia and Europe, which increased by 2% and 3% from a month ago to average 4.35 mb/d and 12.58 mb/d, respectively, in May. North America and Far East arrivals saw drops in May compared with the previous month. US arrivals indicated a drop of 1.3% to stand at 9.38 mb/d and Far East arrivals lost 2.5% to stand at 8.64 mb/d in May.

Spot freight rates
VLCC
The VLCC segment suffered the most in May as spot freight rates for all routes weakened. Spot freight rates for VLCCs on the Middle East-to-East long-haul route decreased by 11% in May compared with the previous month to average WS36. The decrease came on the back of continued low activity, despite the approaching end of maintenance season. VLCC spot freight rates for the Middle East-to-West long-haul route averaged WS26 in May, compared with a month earlier. Freight rates to the West experienced a similar drop to that of the East, as activity waned, leading to a decline of 11% over the previous month. VLCC spot freight rates in West Africa were no exception to other reported regions; they decreased by 8% to average WS39 in May, exhibiting tonnage oversupply and lower lifting from Asian buyers. On average, VLCC freight rates were down from a month earlier by 10%. The VLCC market suffered from increasing competition among VLCC owners, leading to lower freight rates. In many cases operational costs were barely covered.


Suezmax spot freight rates ended the month of May flat from a month earlier. Freight rates reported a slight increase on the Northwest Europe-to-US route to stand at WS51 points, while dropping by a similar level for tankers trading on the West Africa-to-US Gulf Coast (USGC) to average WS55 points.

The West African market firmed at the end of the month, leading to Suezmax tankers ballasting there, thus reducing the high availability of Suezmax in the Middle East. The Suezmax market and freight rates in the Mediterranean and the Black Sea were often reported stable during the month before firming, following freight rate movements in West Africa. Meanwhile, higher freight rates in the West were registered on the back of prompt replacements during a time of relatively tighter availability.

Aframax
Aframax spot freight rates were mixed in May, registering increases on some routes while reflecting losses on others, when compared with last month. These tendencies offset each other, leading to flat changes on average. Gains in Aframax spot freight rates came on both the Indonesia-to-East and the Caribbean-to-US East Coast (USEC) routes, which increased by 2% and 15%, respectively, in May, compared with a month earlier. Tonnage availability appeared to be less in the Caribbean, where there was a healthy amount of activity.

Mediterranean spot freight rates were under pressure in May compared with last month. Mediterranean-to-Mediterranean spot freight rates dropped by 12% in May compared with the previous month, while Mediterranean-to-Northwest Europe rates declined by 9%. The decline in Mediterranean-to-Mediterranean rates was supported by a quiet market and lack of activity, while freight rates did firm occasionally as a flow of activity occurred at the end of the month. However, it was not sufficient to reverse the average downward movement of freight rates. This firmer trend did not last long, as freight rates later declined while the tonnage position list lengthened. Even some delays at the port of Trieste were easily accommodated.

Freight rates in Northwest Europe were flat at the beginning of the month before dropping, mainly in the Baltics. The end of the month saw slightly enhanced freight rates in Northwest Europe as activities increased ahead of several holidays in the region. The Aframax freight rate decline was also affected by maintenance at Primorsk.

Clean spot freight rates
Clean tanker market sentiment was mixed in May compared with the previous month, with East of Suez rates increasing by 5% and those in West of Suez dropping by 9%. In East of Suez, Middle East-to-East spot freight rates gained 15% in May over a month earlier. The clean product tanker market was active across different products in the East of Suez, particularly for Middle East loadings. However, the tonnage list lengthened towards the end of the month as May requirements were covered, hence freight rates started to drop. Singapore-to-East spot freight rates declined 3% on average in May, with freight rates on that route mostly reporting no significant changes.

In West of Suez, Northwest Europe-to-USEC/USGC spot freight rates declined by 7% in May compared with a month earlier, while Mediterranean-to-Mediterranean and Mediterranean-to-Northwest Europe spot freight rates reflected the highest drop, declining by 10% each. On average, clean tanker freight rates were down by 4% from the previous month, reflecting a decline of 15% from the same period one year ago.



Poland >>  12/3/2019 - Fluor Corporation (FLR) announced that it was awarded a services agreement by PKN ORLEN to provide project management contractor (PMC+) services for t...
Denmark >>  11/25/2019 - Total E&P Danmark A/S has awarded Emerson a contract to provide wellhead pressure monitoring technology to enhance safety during the multi-year redeve...

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

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


Austria Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 |

Gulf Oil and Gas
Copyright 2019 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.