Supertanker rates up as July oil cargoes enter Asian market
The cost of shipping 2 million barrels of oil to Asia from the Middle East rose for a second session as traders started booking cargoes to load next month, Bloomberg reports.
Charter rates for supertankers on the benchmark route to Japan from Saudi Arabia increased 1 percent to 41.41 industry-standard Worldscale points, according to the Baltic Exchange in London. Rising fuel costs offset the gain to lead daily earnings down 5.9 percent to $6,773, figures showed today.
Hire costs are down 17 percent from the start of the year, erasing a 43 percent climb to the 2012 high of 71 points on April 4, according to the exchange. While falling oil prices may curb production and tanker demand, bookings of July shipments will reduce the excess of vessels and stabilize rates, Oslo-based analysts at RS Platou Markets AS said in an e-mailed note.
“Rates are not going to start soaring higher but should at least stop declining,” Kevin Sy, a Singapore-based freight-derivatives broker at Marex Spectron Group, said in an e-mailed report today.
The exchange’s assessments don’t account for vessels cutting speed to save on fuel, their largest expense. The price of ship fuel, or bunkers, rose 0.4 percent to $596.69 a metric ton, data compiled by Bloomberg from 25 ports worldwide showed.
The Worldscale system is a method for pricing oil cargoes on thousands of trade routes. Each individual voyage’s flat rate, expressed in dollars a ton, is set once a year. Today’s level means hire costs on the benchmark route are 41.41 percent of the nominal Worldscale rate for that voyage.
The Baltic Dirty Tanker Index, a broader measure of oil-shipping costs that includes vessels smaller than supertankers, slid 0.9 percent to this year’s low of 676, according to the exchange.