Oil-Tanker Surplus Climbs From Six-Month Low as Demand Weakens

A surplus of the largest oil tankers in the Persian Gulf, the world’s biggest crude-loading region, rose from a six-month low as demand to book the ships weakened, according to a Bloomberg News survey.
There are 13 percent more very large crude carriers available over the next 30 days than probable cargoes, the median from four shipbrokers and two owners showed today. That compares with 12 percent last week, the smallest excess since Nov. 27. Each of the tankers can hold 2 million barrels of oil.
Charter costs for VLCCs on the benchmark route to Japan from Saudi Arabia jumped 19 percent last week, according to the Baltic Exchange, a London-based publisher of shipping rates for commodities, before sliding yesterday. Refineries returned from maintenance, spurring demand for crude. The exchange will update costs today around 4 p.m. local time.
“Charterers have stepped back a bit and supply has risen,” Erik Nikolai Stavseth, an analyst at investment bank Arctic Securities ASA in Oslo, said in an e-mailed report. “We see a further decline on the cards today.”
The Worldscale system is a way of pricing oil cargoes on thousands of trade routes. Each individual voyage’s flat rate, expressed in dollars a metric ton, is set once a year. The current level of 45.06 industry-standard Worldscale points means hire costs on the benchmark route are 45.06 percent of the nominal Worldscale rate for the voyage.
Source: Bloomberg