Spot rates for VLCC voyages east from the Middle East Gulf (MEG) look set to surge in the coming days. A Singapore-based broker told Tankerworld Thursday that markets west of the MEG are currently offering more attractive rates, and “owners will ballast their vessels there for better freight” terms. That will result in less tonnage availability in the east, he said. As of Thursday, VLCC markets around the world was already firming, led by a 38 point climb in rates for voyages from West Africa (WAF) to the US Gulf.
According to Fearnleys, WAF-US Gulf rates “shot up in the wake of a strong suezmax market and limited VLCCs in the area.”
Fearnleys on Thursday pegged WAF-US Gulf voyages to have moved from WS 72.5 last week to WS 110 this week, while MEG-East voyages picked up close to 10 Worldscale points to stay around WS 70 for double hull fixtures.
One broker told Tankerworld Thursday that MEG-East rates "are already hitting WS 75" for some fixtures.
There are even rumours of an MEG-China voyage being fixed at WS 87 for late December loading.
Aside from owners' preference for western markets, another factor which could boost MEG-East rates is a surge in VLCCs fixed for storage.
Players say that the number of VLCCs being booked for storage purposes has been steadily increasing, and this could help cut tonnage availability and boost spot rates.
Singapore-based brokers have told Tankerworld of at least five VLCC fixtures for storage purposes concluded in the past few days.
According to ACM Shipping CEO Johnny Plumbe, as many as 12 VLCCs and four suezmaxes have been booked with options to use them as floating storage.
Bloomberg on Thursday quoted another broker saying that the “market is on fire” due to “storage caused by the low oil prices.”
According to Fearnleys, WAF-US Gulf rates “shot up in the wake of a strong suezmax market and limited VLCCs in the area.”
Fearnleys on Thursday pegged WAF-US Gulf voyages to have moved from WS 72.5 last week to WS 110 this week, while MEG-East voyages picked up close to 10 Worldscale points to stay around WS 70 for double hull fixtures.
One broker told Tankerworld Thursday that MEG-East rates "are already hitting WS 75" for some fixtures.
There are even rumours of an MEG-China voyage being fixed at WS 87 for late December loading.
Aside from owners' preference for western markets, another factor which could boost MEG-East rates is a surge in VLCCs fixed for storage.
Players say that the number of VLCCs being booked for storage purposes has been steadily increasing, and this could help cut tonnage availability and boost spot rates.
Singapore-based brokers have told Tankerworld of at least five VLCC fixtures for storage purposes concluded in the past few days.
According to ACM Shipping CEO Johnny Plumbe, as many as 12 VLCCs and four suezmaxes have been booked with options to use them as floating storage.
Bloomberg on Thursday quoted another broker saying that the “market is on fire” due to “storage caused by the low oil prices.”