VLCC

We have now arrived at the holiday season in the West. Last week we predicted rates would firm slightly as more January cargoes were quoted.

We could not have been more wrong. Rates started falling and kept falling. Opec cutbacks are largely to blame, with supply outstripping demand by about 1 million barrels per day (bpd).

To put this into context, it is useful to compare the last recorded figures, which are for November 2004, with November 2003. Crude oil supply was increased by 4.22 million bpd over the same period last year.

Shipowners saw a lack of business and competed fiercely to fix what business was quoted. This sent rates tumbling. Charterers played a clever game by continuing to hide behind the woodwork, waiting to see where rates would go. In the end, Arabian Gulf/West freights settled at about Worldscale (WS) 130 for US Gulf discharge and WS125 for Arabian Gulf/East destinations.

We have now seen some 55 fixtures concluded for January loading where we would expect to see over 100 by now. The tonnage supply, however, seems about average, so we should see some stability in rates for the time being.

In the Western Hemisphere there has still been a number of fixtures concluded for Far East destinations at about WS4.5 million lumpsum. These Indian rates, until recently, have been close to $6 million.

Suezmax

The Suezmax story is one of two halves. The Western Hemisphere half saw a large number of fixtures from the Mediterranean, West Africa and the North Sea. The Eastern Hemisphere half saw rates follow in the wake of VLCC rates and spiral downwards, but only as far as WS200

Rates in the Western Hemisphere firmed by about 20 per cent, to end the week at about WS220-225.

Aframax

Rates in the North Sea continued to firm up with "normal" Aframax tonnage being concluded at about WS250.

Ice-class vessels commanded a large premium for Northern European trading, with such tonnage being concluded north of the Arctic Circle at WS435. Transatlantic voyages also continued to hold up with North Sea to North America vessels being fixed at WS300.

In the Mediterranean, the freight rates very much depended on dates with early tonnage being fixed at a level as high as WS325. For loading later into January, it looks as if rates will ease down towards the WS300 level from a very firm WS 365 obtainable in mid-December.

The Caribbean and Mexico cargoes have been plentiful, as have the vessels to cover them. This resulted in fairly steady rates being seen in this area.

Andrew Lansdale is a shipbroker and marine consultant with more than 40 years' experience in the tanker and dry cargo markets.