Bloomberg News

Oil-Tanker Glut Is Unchanged From Four-Week High, Survey Shows

February 15, 2012

Feb. 14 (Bloomberg) -- A surplus of the largest oil tankers competing to load crude at Persian Gulf ports stayed unchanged after reaching a four-week high last week, a survey showed.

There are 10 percent more very large crude carriers available for hire over the next 30 days than there are likely cargoes, according to a Bloomberg survey of seven shipbrokers and owners today. The glut was the biggest since Jan. 10 as of last week.

The VLCC surplus reached a 14-month low of 5 percent on Jan. 17, helped by stronger crude demand before China’s New Year. VLCCs on the benchmark Saudi Arabia-to-Japan voyage are earning $8,191 daily, according to the London-based Baltic Exchange. That’s down 75 percent from Jan. 20, the last day before Chinese markets closed for a week for the New Year.

“Overcapacity continues to impact the market negatively,” Oslo-based investment bank Pareto Securities AS said in an e- mailed report today.

Charter rates for VLCCs, each able to haul 2 million barrels of crude, on the benchmark route gained 0.5 percent to 49.38 Worldscale points yesterday.

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.

China is the world’s second-biggest consumer of crude oil after the U.S.

--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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