Thursday, June 18, 2009
Tanker supply shrinks amid extra crude
Thursday, 18 June 2009
A surplus of supertankers competing to ship 2 million-barrel cargoes of crude from the Middle East shrank for a second week, a sign the region's oil producers may be supplying more of the fuel. There are 10 per cent more ships for hire than cargoes for delivery over the next 30 days, according to a Bloomberg News survey of three shipbrokers, two shipowners, one trader and one derivatives broker. That's down from estimated surpluses of 15 per cent a week ago and 45 per cent two weeks ago.
The number of cargoes has been 'better than expected' in May and June, Per Mansson, managing director of shipbroker Nor Ocean Stockholm AB, said on Monday. Vessel supply is further constrained because some carriers are being deployed for storage and owners instructed captains to sail at slower speeds when freight rates fell to unprofitable levels, he said.
Shipping costs on the industry benchmark route from Saudi Arabia to Japan were little changed, slipping 0.1 per cent to 51.69 Worldscale points, according to prices from the London-based Baltic Exchange. Lease rates climbed 41 per cent last week, the biggest increase since the week to Jan 9.
Saudi Arabia, Iran, Iraq, Kuwait, Qatar and the United Arab Emirates boosted their combined output of oil by 1.7 per cent to 19.2 million barrels a day in May. That was the largest such increase since June 2008, when they lifted joint production by 2 per cent to a daily rate of 22 million barrels.
The six nations constitute the Organization of Petroleum Exporting Countries members in the Middle East. With the exception of Iraq, which isn't bound by Opec production quotas, they agreed to cut supplies three times since September after the oil price fell last year.
A rate of 51.69 points works out at US$34,266 a day, according to the Baltic Exchange. For oil companies, costs on the Saudi Arabia-Japan route advanced to about US$1.65 a barrel on June 12 from 91 cents at the end of May, according to data compiled by Bloomberg.
Among smaller vessel sizes, the biggest advance on Monday was for aframax-class tankers that normally haul about 650,000 barrels of cargo in Europe.
Source: Bloomberg
