Bloomberg News

Tanker Returns May Rise on Fewer Available Vessels, Pareto Says

January 06, 2012

Jan. 5 (Bloomberg) -- Returns for the largest oil tankers hauling Middle East crude to Asia may rise after the number of surplus ships fell to two a cargo, Pareto Securities AS said.

There are between 4 and 6 cargoes left in the Persian Gulf for the second 10-day period in January, with 10 vessels available to load them, the Oslo-based investment bank said in an e-mailed report today.

The surplus of tankers competing to load crude from the gulf shrank to a seven-week low, a Bloomberg survey showed Jan. 3. Oil companies hired 140 vessels in December, the most for a month since at least 2005, according to data from London-based shipbroker Galbraith’s Ltd. Concern that Iran may disrupt shipments from the region contributed to the increase, consultant FACTS Global Energy said Dec. 22.

“We should see some upward pressure on rates in the short term,” Pareto analysts led by Martin Korsvold said in the report.

Daily income for very large crude carriers, each able to haul 2 million barrels of crude, on the benchmark Saudi Arabia- to-Japan voyage gained 2.6 percent yesterday to $12,597, according to the London-based Baltic Exchange. Rates to charter VLCCs on the route increased 0.5 percent to 49.99 industry- standard Worldscale points.

The points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.

--Editors: Dan Weeks, John Deane.

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

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


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