Bloomberg News

Tanker Demand Will Match Supply by Winter 2012, Teekay Says

October 06, 2011

(Updates with chief executive’s comments starting in second paragraph.)

Oct. 6 (Bloomberg) -- Demand for oil tankers will match supply by the Northern Hemisphere’s next winter, lifting charter rates for the vessels, according to Teekay Corp., the largest U.S.-listed owner of the ships.

“The tanker market is bottoming,” Chief Executive Officer Peter Evensen said in an interview at a conference in London today, adding that the smaller-sized oil tankers which dominate Teekay’s fleet will recover before larger carriers. “We see a recovery in the winter of 2012 going into 2013, when demand catches up with supply.”

The global fleet of aframax tankers, which haul 600,000 barrels of crude, will expand 1.6 percent in 2013, compared with 7.5 percent growth for larger suezmaxes, he said. The combined capacity of supertankers that can haul 2 million barrels of oil, known in the industry as very large crude carriers, will rise by 6 percent, the CEO forecast.

A world excess of tankers might be curbed by further slowing vessel speeds, Evensen said. Dropping to 12 knots from 14 knots saved as much as 25 metric tons of fuel oil daily, he said. Each ton costs as much as $700, according to Evensen.

Lack of Financing

Construction of new ships is being delayed because owners are struggling to get finance to pay for them, he said. Teekay, based in Hamilton, Bermuda, is the largest operator in the six- company Bloomberg Tanker Index, with a market value of $1.56 billion.

Charter rates for VLCCs loading West African crude for U.S. Gulf Coast ports jumped the most since January 2010 today, according to the Baltic Exchange in London. Costs measured in industry-standard Worldscale terms advanced 23 percent to 62.32 points.

Delays in passing through the Turkish Straits are driving up charter rates for smaller tankers that carry crude from Black Sea ports to export markets, said Ben Goggin, a broker at SSY Futures Ltd., a unit of the world’s second-largest shipbroker. That is shrinking supply of larger supertankers and causing freight rates to rise, he said.

The straits connect the Black Sea and the Aegean Sea.

--Editors: Dan Weeks, John Deane.

To contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus