Charterers slow down for lunar year

VLCC

Just about all the liftings for February from the Arabian Gulf have been arranged.

So far, about 98 fixtures have been concluded, which is par for the course for a short month.

Charterers appear to have been fairly quiet ahead of the Lunar New Year and rates have been steady, as we predicted in our last report.

The "going rate" has settled at Worldscale 120 to the west and WS155 to the east. There has been a small amount of fixing for March dates.

When the nominations are made public in the middle of this week for the whole month, there should be a greater volume of business concluded.

The tonnage supply seems to be adequate and this suggests that only unusual occurrences will place upward pressure on freight rates.

There is still the usual quantity of business being concluded in the Atlantic basin. Rates from West Africa to the Far East seem to have settled at around the WS135 level.

Suezmax

In the Arabian Gulf there has been a lack of demand for Suezmax tonnage, prompted mainly by Chinese New Year. Rates will probably have remained steady at about WS190, although this has not been tested.

In West Africa, charterers held back and with this low volume of business, rates fell back from Worldscale 180 to 155. As more cargoes were quoted, rates recovered slightly to end the week on WS160.

To the north of the Suez Canal there was a collision between two oil tankers in which about 1,500 tons of oil was spilled.

Often there is an instant reaction from the authorities in such a situation, which usually takes the form of an exclusion for certain classes of vessel. In this case, the response was muted and there were no repercussions.

Business resumed as usual and liftings from the north end of the SuMed pipeline at Sidi Kerir continued. Both single hull and double hull tankers were utilised in this trade. Rates held steady, at WS180 for the former and WS190 for the latter.

Aframax

The Chinese New Year also affected the smaller Aframax size vessels. Rates fell from Worldscale 180 to WS 145 for a Gulf/East voyage. Further east, the Indonesia/Japan rates also fell to end the week at about WS 125.

This lack of enquiry was mirrored in the Mediterran-ean and Black Sea loading areas and rates fell 10-15 WS points to WS130 for Med voyages and WS160 from the Black Sea.

Delays in the Turkish straits are still a factor. Any more bad weather in that area will pull rates sharply upwards again.

In contrast, the market in Northwest Europe has had mixed fortunes. There have been more cargoes from the North Sea for 80,000 tonne lots, but fewer 100,000 tonne cargoes from the Baltic and from the "cold north".

As a consequence, rates firmed quickly from WS122 to WS165 for the smaller cargoes and fell from WS400 to about WS 330 for ice-class vessels.

Larger amounts of fuel oil being shipped to the United States from Europe were responsible for firming up rates for trans-Atlantic voyages, which rose from WS185 to WS220.

Additionally, there was more demand in the United States for Caribbean crude oil and, building on rate increases a week ago, freights moved up to finish the week on WS190 for the traditional 70,000 tonne cargo size.

Oil matters

The multinational oil company Shell recently announced record profits for a British company Dh64.59 billion.

Also in their annual report was a further reduction in their oil reserves, the fifth such announcement this year. More worrying still is the fact their reserves replacement was less than 100 per cent.

Figures now being released show world crude oil demand increased by 3.2 per cent in 2004, to 85 million barrels per day; of this, the United States took 21 million bpd.

In the Far East, South Korean and Japanese demand was steady, or, as some would describe it, flat; China's rose ten per cent.

There is a body of opinion which suggests the supply of oil will start to fall from the end of 2005 and that there are no new oil fields to discover and to develop.

Perhaps Shell's disclosure on reserves is the first of many from multinational oil companies.

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