The rates for hiring medium to long-range tankers to transport oil products including diesel on Asian routes fell as Japan's oil inventories increased, reducing demand for ships.
The rate for moving 30,000 tonnes of oil products to Japan from Singapore declined for a third day, losing one per cent to Worldscale 237.08, according to the London-based Baltic Exchange. That translates to US$20.69 for a tonne of product, according to Bloomberg data.
Oil product inventories in Japan, Asia's second-largest oil consumer, rose to 13.9 million kiloliters (118 million barrels). Gasoline stockpiles in Japan increased 1.1 per cent to 1.88 million kiloliters, the Petroleum Association of Japan said on Wednesday.
Naphtha inventories gained 4.7 per cent to 1.77 million kiloliters. Naphtha, distilled from crude oil, is a raw material used to make chemicals, plastics and gasoline.
The rate of shipping a 55,000-tonne cargo to Japan from the Middle East fell 0.3 per cent to Worldscale 199.81, the Baltic Exchange said. That translates to US$34.79 a tonne, according to Bloomberg data.
Four medium-range tankers are scheduled to arrive this week in Singapore and two more in the next week, according to Bloomberg data. A medium-range tanker can carry 25,000 to 44,999 tonnes of oil products. A long-range 1 tanker, also known as LR1, can carry 50,000 to 80,000 tonnes of oil products and is able to pass through the Panama Canal.
There is still strong demand in the Far East market, particularly in North Asia, for tankers carrying clean products such as gasoline and diesel, according to shipbrokers including London-based E.A. Gibson Shipbrokers Ltd. That may limit the decline in charter rates.
'Product tanker rates could see further gains this week, as fewer vessels are open for spot voyages,' said DnBNor Markets analysts, Glenn Lodden and Henrik With, in an Aug 1 report. 'The Far East market should continue to be the driving force behind the projected upturn.'
The cost of shipping 75,000 tonnes of products to Japan from the Persian Gulf was at Worldscale 147.92 on Wednesday, up 0.03 per cent, the Baltic Exchange showed. That translates to US$34.79 a tonne, according to Bloomberg data.
A typhoon approaching the south-western island of Kyushu in Japan has not disrupted shipping, brokers said. Japan's weather agency has issued warnings for heavy rains, floods and high waves as Typhoon Usagi approaches Kyushu.
It is the third-strongest on the five-step Saffir-Simpson scale, with winds of 193 kmh, according to the latest advisory on the US Navy's Joint Typhoon Warning Centre website.
Worldscale points are a percentage of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in US dollars a tonne, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
The rate of shipping 80,000 tonnes of crude oil on so-called aframax tankers to Singapore from Kuwait rose 0.4 per cent to Worldscale 135.77 on Wednesday, according to the Baltic Exchange. The rate has advanced 6.5 per cent in the past 11 days.
The rate for moving 30,000 tonnes of oil products to Japan from Singapore declined for a third day, losing one per cent to Worldscale 237.08, according to the London-based Baltic Exchange. That translates to US$20.69 for a tonne of product, according to Bloomberg data.
Oil product inventories in Japan, Asia's second-largest oil consumer, rose to 13.9 million kiloliters (118 million barrels). Gasoline stockpiles in Japan increased 1.1 per cent to 1.88 million kiloliters, the Petroleum Association of Japan said on Wednesday.
Naphtha inventories gained 4.7 per cent to 1.77 million kiloliters. Naphtha, distilled from crude oil, is a raw material used to make chemicals, plastics and gasoline.
The rate of shipping a 55,000-tonne cargo to Japan from the Middle East fell 0.3 per cent to Worldscale 199.81, the Baltic Exchange said. That translates to US$34.79 a tonne, according to Bloomberg data.
Four medium-range tankers are scheduled to arrive this week in Singapore and two more in the next week, according to Bloomberg data. A medium-range tanker can carry 25,000 to 44,999 tonnes of oil products. A long-range 1 tanker, also known as LR1, can carry 50,000 to 80,000 tonnes of oil products and is able to pass through the Panama Canal.
There is still strong demand in the Far East market, particularly in North Asia, for tankers carrying clean products such as gasoline and diesel, according to shipbrokers including London-based E.A. Gibson Shipbrokers Ltd. That may limit the decline in charter rates.
'Product tanker rates could see further gains this week, as fewer vessels are open for spot voyages,' said DnBNor Markets analysts, Glenn Lodden and Henrik With, in an Aug 1 report. 'The Far East market should continue to be the driving force behind the projected upturn.'
The cost of shipping 75,000 tonnes of products to Japan from the Persian Gulf was at Worldscale 147.92 on Wednesday, up 0.03 per cent, the Baltic Exchange showed. That translates to US$34.79 a tonne, according to Bloomberg data.
A typhoon approaching the south-western island of Kyushu in Japan has not disrupted shipping, brokers said. Japan's weather agency has issued warnings for heavy rains, floods and high waves as Typhoon Usagi approaches Kyushu.
It is the third-strongest on the five-step Saffir-Simpson scale, with winds of 193 kmh, according to the latest advisory on the US Navy's Joint Typhoon Warning Centre website.
Worldscale points are a percentage of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in US dollars a tonne, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
The rate of shipping 80,000 tonnes of crude oil on so-called aframax tankers to Singapore from Kuwait rose 0.4 per cent to Worldscale 135.77 on Wednesday, according to the Baltic Exchange. The rate has advanced 6.5 per cent in the past 11 days.