Bloomberg News

Oil-Tanker Rates Gain for Third Day as Demand Diminishes Glut

May 01, 2013

Rates for oil tankers shipping Saudi Arabian crude to Japan advanced a third day as a surplus of the vessels diminished, allowing owners to boost charter prices.

Costs rose 1.9 percent to 34 Worldscale points on the trade route that’s used to settle freight swaps, according to data from the Baltic Exchange in London. The rate equates to daily earnings of $1,504, the bourse’s calculations show. Owners need about $9,300 a day more than that to cover running costs including crew and insurance, according to the most recent estimate of industry expenses from Moore Stephens LLP, a London- based consultant.

A glut of the supertankers averaged 20 percent last month, the smallest excess since January, according to weekly market surveys by Bloomberg. Supply of the vessels will climb 5 percent this year while demand swells 5.1 percent, according to Clarkson Plc, the world’s largest shipbroker.

The advance in rates this week is because of a “short burst of inquiries out of Asia,” Sam Margolin, an analyst at Cowen Securities LLC, a New York-based investment bank, said in an e-mailed note today. The surplus of vessels will curb future gains, he said.

The biggest change in rates for crude tankers was for vessels transporting 70,000 metric-ton cargoes to the U.S. Gulf from the Caribbean. Costs for those rose 8.1 percent to 102.95 Worldscale points, according to the exchange.

Costs for vessels moving 38,000 tons of diesel to Europe from the U.S. Gulf jumped 2.8 percent to 77.5 Worldscale points, the biggest move for tankers hauling refined fuels.

To contact the reporter on this story: Alaric Nightingale in London at anightingal1@bloomberg.net

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


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