A glut of supertankers competing to ship Middle East crude shrank for a second week as unprofitable lease rates prompted owners to anchor some vessels and sail others more slowly.
There are 20 per cent more very large crude carriers, or VLCCs, for hire than there are cargoes, according to the median estimate of four ship brokers and three owners surveyed by Bloomberg News on Monday. The surplus shrank for the first time in four weeks last week, declining to 30 per cent from 35 per cent.
Some owners are leaving ships at anchor off Singapore and elsewhere because income fails to cover costs, said Halvor Ellefsen, a tanker broker at SeaLeague A/S in Oslo. Some are also ordering captains to slow to conserve fuel, he said.
Lease rates on the industry benchmark Saudi Arabia-to-Japan route climbed 4.1 per cent to 35.15 Worldscale points on Monday, according to the London-based Baltic Exchange, the fifth gain. Rents advanced 11 per cent last week.
Daily income after fuel costs from the voyage rose 47 per cent to US$8,333, according to data from the exchange. That's still less than the US$11,603 a day Drewry Shipping Consultants Ltd estimates the carriers must earn to pay crew, insurance, repairs and other running costs.
The number of VLCCs in service globally has shrunk 1.1 per cent to 525 ships since Aug 7, according to Lloyd's Register-Fairplay data on Bloomberg.
The average sailing speed of VLCCs has dropped 3.5 per cent to 8.98 knots this month, according to signals from the vessels compiled by Bloomberg. The slower they sail, the fewer there are to ship cargoes.
The cost of ship fuel, an owner's biggest single expense, has climbed 93 per cent to an average of US$423 a metric ton this year globally, according to data compiled by Bloomberg. VLCCs burn about 100 tons of the fuel a day when sailing at full speed, according to Riverlake Shipping SA, Switzerland's biggest shipbroker.
Rental income from suezmax-class tankers that ship 1 million-barrel cargoes fell 4.5 per cent to US$12,582 a day, according to the Baltic Exchange. Returns from aframaxes that haul 650,000-barrel cargoes advanced 22 per cent to US$1,592 a day.
There are 20 per cent more very large crude carriers, or VLCCs, for hire than there are cargoes, according to the median estimate of four ship brokers and three owners surveyed by Bloomberg News on Monday. The surplus shrank for the first time in four weeks last week, declining to 30 per cent from 35 per cent.
Some owners are leaving ships at anchor off Singapore and elsewhere because income fails to cover costs, said Halvor Ellefsen, a tanker broker at SeaLeague A/S in Oslo. Some are also ordering captains to slow to conserve fuel, he said.
Lease rates on the industry benchmark Saudi Arabia-to-Japan route climbed 4.1 per cent to 35.15 Worldscale points on Monday, according to the London-based Baltic Exchange, the fifth gain. Rents advanced 11 per cent last week.
Daily income after fuel costs from the voyage rose 47 per cent to US$8,333, according to data from the exchange. That's still less than the US$11,603 a day Drewry Shipping Consultants Ltd estimates the carriers must earn to pay crew, insurance, repairs and other running costs.
The number of VLCCs in service globally has shrunk 1.1 per cent to 525 ships since Aug 7, according to Lloyd's Register-Fairplay data on Bloomberg.
The average sailing speed of VLCCs has dropped 3.5 per cent to 8.98 knots this month, according to signals from the vessels compiled by Bloomberg. The slower they sail, the fewer there are to ship cargoes.
The cost of ship fuel, an owner's biggest single expense, has climbed 93 per cent to an average of US$423 a metric ton this year globally, according to data compiled by Bloomberg. VLCCs burn about 100 tons of the fuel a day when sailing at full speed, according to Riverlake Shipping SA, Switzerland's biggest shipbroker.
Rental income from suezmax-class tankers that ship 1 million-barrel cargoes fell 4.5 per cent to US$12,582 a day, according to the Baltic Exchange. Returns from aframaxes that haul 650,000-barrel cargoes advanced 22 per cent to US$1,592 a day.