Persian oil tanker rates may rise
The cost of delivering Middle East crude to Asia, the world's busiest route for supertankers, may climb for a fourth session in London as some owners reject unprofitable cargoes following a collapse in rental income.
The average daily income from supertankers delivering Middle East oil to refineries in Japan and the US has for the past two weeks traded below what Frontline Ltd, the largest operator of the ships, needs to pay crew, repairs and other daily running costs, according to data from the London-based Baltic Exchange and the company.
The number of vessels owned by companies willing to accept present rental rates appears 'tight' compared with early-May cargoes, Per Mansson, managing director of Nor Ocean Stockholm AB, said by e-mail yesterday. 'Maybe they are not willing to subsidise transportation.'
Income of owners collapsed as the Organization of Petroleum Exporting Countries (Opec) curtails output to help buoy the price of the commodity. That left the market with about 30 per cent to 40 per cent more ships than cargoes, according to Bloomberg weekly surveys of supply and demand.
PTT Pcl, Thailand's biggest company, hired the tanker Yiomaral for 29.75 Worldscale points, according to a report yesterday from Athens-based Optima Shipbrokers Ltd. That's 6.9 per cent above the London-based Baltic Exchange's comparable assessment of 27.84 points for a cargo to Singapore.
The benchmark shipping rate that's used to settle freight- derivatives contracts is based on shipments to Japan. That rose 3.9 per cent to 26.97 points on April 17 for its biggest one-day advance since Feb 12.
Yiomaral is fitted with two layers of steel separating the sides of the cargo tanks from the ocean and one layer on the bottom. The bourse's assessment is dominated by rentals of double-hulled carriers that usually cost more to hire.
Rental income after fuel from shipping Saudi Arabian crude from the nation's Ras Tanura facility to Japan or the US climbed 25 per cent to US$4,626 a day on April 17, according to the Baltic Exchange. Since April 6, it's been below US$12,000 a day, the amount that Frontline said on Feb 26 it needs for running costs on each of its ships.
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 US dollars a tonne, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Each flat rate assessment allows owners to calculate daily rental income and oil companies to determine the cost per barrel of shipping oil.
A rate of 29.75 points for Japan consignments works out at US$8,521 a day, according to the Baltic Exchange. US-bound shipments are paying US$731 a day. Frontline requires US$32,100 after fuel costs once interest repayments are taken into account.
The average daily income from supertankers delivering Middle East oil to refineries in Japan and the US has for the past two weeks traded below what Frontline Ltd, the largest operator of the ships, needs to pay crew, repairs and other daily running costs, according to data from the London-based Baltic Exchange and the company.
The number of vessels owned by companies willing to accept present rental rates appears 'tight' compared with early-May cargoes, Per Mansson, managing director of Nor Ocean Stockholm AB, said by e-mail yesterday. 'Maybe they are not willing to subsidise transportation.'
Income of owners collapsed as the Organization of Petroleum Exporting Countries (Opec) curtails output to help buoy the price of the commodity. That left the market with about 30 per cent to 40 per cent more ships than cargoes, according to Bloomberg weekly surveys of supply and demand.
PTT Pcl, Thailand's biggest company, hired the tanker Yiomaral for 29.75 Worldscale points, according to a report yesterday from Athens-based Optima Shipbrokers Ltd. That's 6.9 per cent above the London-based Baltic Exchange's comparable assessment of 27.84 points for a cargo to Singapore.
The benchmark shipping rate that's used to settle freight- derivatives contracts is based on shipments to Japan. That rose 3.9 per cent to 26.97 points on April 17 for its biggest one-day advance since Feb 12.
Yiomaral is fitted with two layers of steel separating the sides of the cargo tanks from the ocean and one layer on the bottom. The bourse's assessment is dominated by rentals of double-hulled carriers that usually cost more to hire.
Rental income after fuel from shipping Saudi Arabian crude from the nation's Ras Tanura facility to Japan or the US climbed 25 per cent to US$4,626 a day on April 17, according to the Baltic Exchange. Since April 6, it's been below US$12,000 a day, the amount that Frontline said on Feb 26 it needs for running costs on each of its ships.
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 US dollars a tonne, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Each flat rate assessment allows owners to calculate daily rental income and oil companies to determine the cost per barrel of shipping oil.
A rate of 29.75 points for Japan consignments works out at US$8,521 a day, according to the Baltic Exchange. US-bound shipments are paying US$731 a day. Frontline requires US$32,100 after fuel costs once interest repayments are taken into account.