The Worldscale rate for Persian Gulf-Far East voyages on double-hulled very large crude carriers is edging down toward the w25 level with tonnage for these vessels building up and fewer May cargoes covered so far, shipping sources said Monday. "Worldscale 25 is the last protection level for owners," a chartering source with a Far East refiner said. "[There are] many vessels at Fujairah."
Most of the vessels coming to pick a crude cargo sit around Fujairah while they wait for their loading orders.
Meanwhile, South Korean charterer GS Caltex took the double-hulled Samho Dream for a Persian Gulf-South Korea voyage to move a 265,000 mt cargo, loading May 19-21, at w27.
"They [GS Caltex] got 10 offers. They were looking for w24, but owners were holding out," another chartering source said. "If 10 or more owners are offering then surely the market is very weak."
But the charterer added that with the bunker price going up, the owners may not agree for w25. The bunker price in Singapore closed at $346/mt on Friday, while for most of March the price stayed at around $250/mt.
East VLCC rates have been under pressure since September 2008 when OPEC announced it was cutting output by 4.2 million b/d.
From an average of 110 cargoes covered a month in 2008 out of the Persian Gulf, the number has been at 89 cargoes a month since the beginning of this year.
"This [the GS Caltex fixture] is not the lowest this year and the market is definitely not good," a source with an owner said. "Some owners are trying very hard to hold [on] ... [but] some just can't ... which has made the market to drop again."
At w27, the earnings for an owner would be close to $6,000/day. Last week, when the rate was hovering around w30, owners pulled in $19,500/day, according to a broker.
The benchmark Persian Gulf-East route was assessed at w28 on Friday.
Most of the vessels coming to pick a crude cargo sit around Fujairah while they wait for their loading orders.
Meanwhile, South Korean charterer GS Caltex took the double-hulled Samho Dream for a Persian Gulf-South Korea voyage to move a 265,000 mt cargo, loading May 19-21, at w27.
"They [GS Caltex] got 10 offers. They were looking for w24, but owners were holding out," another chartering source said. "If 10 or more owners are offering then surely the market is very weak."
But the charterer added that with the bunker price going up, the owners may not agree for w25. The bunker price in Singapore closed at $346/mt on Friday, while for most of March the price stayed at around $250/mt.
East VLCC rates have been under pressure since September 2008 when OPEC announced it was cutting output by 4.2 million b/d.
From an average of 110 cargoes covered a month in 2008 out of the Persian Gulf, the number has been at 89 cargoes a month since the beginning of this year.
"This [the GS Caltex fixture] is not the lowest this year and the market is definitely not good," a source with an owner said. "Some owners are trying very hard to hold [on] ... [but] some just can't ... which has made the market to drop again."
At w27, the earnings for an owner would be close to $6,000/day. Last week, when the rate was hovering around w30, owners pulled in $19,500/day, according to a broker.
The benchmark Persian Gulf-East route was assessed at w28 on Friday.