Falling consumer stockpiles buoy tanker rates

The Russian tanker Viktor Titov has loaded 100,000 tonnes of crude oil for delivery to Mangalore, marking the first shipment from the Sakhalin-I field, part-owned by India's Oil and Natural Gas Corp (ONGC).

In future, the crude will be brought to ONGC's subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL) on a regular basis for refining. ONGC Videsh Ltd (OVL), state-owned explorer's overseas arm, holds a 20 per cent stake in the Sakhalin-I field, operated by ExxonMobil, which holds a 30 per cent equity stake.

The warm autumn has finished and winter has come in with a roar. With it rose the price of energy and down went the high stock levels.

The tanker market which has been hit by high crude and product inventories of late, saw this as a welcome reversal. Both the VLCC and Suezmax West Africa rates have reacted to this increased demand.

The VLCC reaction is one of steadiness as the Arabian Gulf market weakens. Suezmax rates rose to Worldscale 150 during November and then settled. Clean rates also reacted: especially the Caribbean and the trans-Atlantic freights, which both rose sharply.

Denmark's A.P. Moeller Group, owners of the world's largest ocean carrier Maersk Line, said it expects its container shipping division to post a net loss of $600 million this year as a result of lower freight rates, higher fuel costs and integration costs relating to its acquisition of P&O Nedlloyd. But the Danish group said that freight rates slumped six per cent in the first nine months of this year while its fuel expenses soared 35 per cent.

The single-hull Astro Lupus was fixed by the SK Corporation at Worldscale 52.5, while the Titan Venus went to TPI for a voyage from the Gulf to Thailand at WS47.5. Double-hull VLCCs attracted rates about 10 points more for trips to the East.

Rates to the West have fared little better. French oil major Total fixed a Tankers International double hull vessel to North West Europe at WS60.

Suezmax rates were steadier as demand in the Atlantic basin rose. But they were still relatively weak. Repsol fixed the Jag Lalit at WS130 for a trip from West Africa to the US Gulf, down from WS145 ealier in the week.

Aframax tonnage is still having a testing time of it. In the Arabian Gulf rates have fallen to below WS150, and in the Far East they have weakened similarly.

In the Mediterranean and the Black Sea, Aframax tonnage has been concluded at around WS100 despite increasing delays in the Turkish Straits.

The Kareela Spirit was fixed by IES for a cross-Med voyage at WS95. Trips from the North Sea and the Baltic were similarly weak, but added demand saw Caribbean rates steady at about WS170.

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