The cost to transport crude oil from the Caribbean on Aframax tankers fell as port delays eased, freeing ships for new voyages. The availability of ships may drive rates lower this week.
Vessels on Friday were hired for an average rate of Worldscale, or WS, 357.5, an 11 per cent decrease from May 23, according to Houston-based Lone Star, R S Platou and New York-based Poten & Partners. That's equal to about US$65,000 per day after expenses such as fuel and port fees.
'The delays are slowly but surely unwinding, and there's been an overabundance of tonnage' in the region, Bruce Kahler, a broker for Lone Star, R S Platou, said in an interview on Friday. Weakness in North Sea and Mediterranean markets are keeping ships in the Caribbean, Mr Kahler noted. 'The ships are sitting here, saying 'I'll stay here until the market goes down, and then we'll go away again',' he added.
Rates more than doubled last month, aided by rising margins for US refiners. The so-called crack spread, the difference between the cost of crude oil and income from selling gasoline and heating oil, has risen 53 per cent last month to US$18.356 a barrel, based on New York futures prices. 'Demand for crude transport into the US has been buoyed by the upward trajectory of US crack spreads,' said Omar Nokta, an analyst at Dahlman Rose & Co in New York.