Monday, June 22, 2009
Persian Gulf Tanker Rates Fall Most in Six Weeks
Monday, 22 June 2009
The cost of delivering Middle East crude to Asia, the world’s busiest route for supertankers, posted its biggest weekly drop in six as demand from oil companies for ships to load next month’s cargoes fell. Shipping costs on the Saudi Arabia to Japan route, the industry benchmark, fell 0.6 percent to 49.22 Worldscale points today, according to the London-based Baltic Exchange. That took the week’s decline to 4.8 percent, the largest such drop since the week to May 8. Daily earnings for ships plowing the route fell 3.4 percent to $30,340.
“Activity slowed down considerably” as oil companies delay hiring the ships they need to try and “cool” rates, Oslo-based PF Bassoe AS said in an e-mailed report today.
This week’s decline in demand and bookings comes after rental rates last week advanced by the most since January, amid speculation Middle East oil-producing nations were boosting output.
Worldscale 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.
Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
Source: Alaric Nightingale, Bloomberg
