The cost of shipping Middle East crude to Asia, the world's busiest market for supertankers, may fall for a second week as a glut of vessels forces owners to compete for cargoes.
There are about 100 very large crude carriers, or VLCCs, that can load at Middle East ports this month compared with 40 to 50 outstanding cargoes, according to a report yesterday from Paris-based shipbroker Barry Rogliano Salles.
GS Caltex Corp, South Korea's second-biggest refiner, hired the vessel New Vitality at a rate of 57 Worldscale points, according to Barry Rogliano. That's 6.4 per cent below the London-based Baltic Exchange's assessment for similar voyages of 60.91 points. The index dropped 7.6 per cent last week.
New Vitality is fitted with one steel hull separating the crude it transports from the ocean. Such ships normally cost less to hire than the exchange's benchmark, which also takes into account modern double-hull tankers that cut the risk of an oil spill in the event of an accident.
Hurricane Felix, a category 5 storm that is forecast to hit Central America this week, so far hasn't buoyed demand for vessels, Nikos Varvaropoulos, a broker for Athens-based Optima Shipbrokers, said.
Storms slow shipping operations, reducing vessel supply. It will take 'two to three weeks' before any storm-related delays boost the tanker markets, Mr Varvaropoulos said.
The number of tankers signalling that they are sailing toward US ports fell by a third in the two weeks to Aug 29, as refineries in the world's biggest oil-consuming nation undertake annual repair works.
Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates, quoted in US dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
At 60.91 Worldscale points, owners of double-hulled VLCCs can earn about US$28,957 a day on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by RS Platou, an Oslo-based shipbroker, and Bloomberg bunker prices. Frontline said on Aug 22 it needs US$30,000 a day to break even on each of its supertankers.
Bookings for supertankers sailing from the Middle East to Asia account for 47 per cent of global demand for the carriers, according to New York-based McQuilling Brokerage Partners LLP. Shipments to the US and Caribbean, the second-biggest market, account for 14 per cent of demand for supertankers.
There are about 100 very large crude carriers, or VLCCs, that can load at Middle East ports this month compared with 40 to 50 outstanding cargoes, according to a report yesterday from Paris-based shipbroker Barry Rogliano Salles.
GS Caltex Corp, South Korea's second-biggest refiner, hired the vessel New Vitality at a rate of 57 Worldscale points, according to Barry Rogliano. That's 6.4 per cent below the London-based Baltic Exchange's assessment for similar voyages of 60.91 points. The index dropped 7.6 per cent last week.
New Vitality is fitted with one steel hull separating the crude it transports from the ocean. Such ships normally cost less to hire than the exchange's benchmark, which also takes into account modern double-hull tankers that cut the risk of an oil spill in the event of an accident.
Hurricane Felix, a category 5 storm that is forecast to hit Central America this week, so far hasn't buoyed demand for vessels, Nikos Varvaropoulos, a broker for Athens-based Optima Shipbrokers, said.
Storms slow shipping operations, reducing vessel supply. It will take 'two to three weeks' before any storm-related delays boost the tanker markets, Mr Varvaropoulos said.
The number of tankers signalling that they are sailing toward US ports fell by a third in the two weeks to Aug 29, as refineries in the world's biggest oil-consuming nation undertake annual repair works.
Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates, quoted in US dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
At 60.91 Worldscale points, owners of double-hulled VLCCs can earn about US$28,957 a day on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by RS Platou, an Oslo-based shipbroker, and Bloomberg bunker prices. Frontline said on Aug 22 it needs US$30,000 a day to break even on each of its supertankers.
Bookings for supertankers sailing from the Middle East to Asia account for 47 per cent of global demand for the carriers, according to New York-based McQuilling Brokerage Partners LLP. Shipments to the US and Caribbean, the second-biggest market, account for 14 per cent of demand for supertankers.