Oil-Tanker Rates Resume Decline as Charterers Await July Cargoes

Hire rates for oil tankers hauling 2 million-barrel cargoes of Persian Gulf crude to Asia resumed a decline as charterers awaited next month’s cargoes from the world’s largest export region.
Charter costs for very large crude carriers on the benchmark Saudi Arabia-to-Japan trade route fell 2.4 percent to 41.67 Worldscale points, the industry-standard measure, figures from the Baltic Exchange in London showed today. Rates rose yesterday after sliding 9.9 percent in six sessions.
VLCCs needed to earn about $10,780 a day to cover running costs including crew, insurance and repairs in 2011, according to the most recent assessment of industry expenses by Moore Stephens LLP, a London-based accountant. Daily returns are $14,731 on the benchmark voyage, down 11 percent from yesterday, according to the exchange.
“Rates have eased off a touch, but not as much as charterers hoped and aimed for,” the consulting unit of Oslo-based shipping-services and investment-banking company Astrup Fearnley said in an e-mailed report. “As the dry spell continues and supply of tonnage is adding up, rates are expected to remain under pressure.”
The exchange’s earnings assessments don’t account for speed cuts aimed at reducing ships’ use of fuel, the single biggest expense for the industry.
The Baltic Dirty Tanker Index, a broader measure of costs to transport oil by sea, declined 1.2 percent to 594, staying at the lowest level since November 2009, according to the exchange.
Today’s biggest change in rates for oil tankers was for 70,000 metric-ton cargoes bound for the U.S. Gulf Coast from the Caribbean, down 7 percent to 100.23 Worldscale points, according to the bourse. The largest move for ships hauling refined fuels was for 38,000-ton cargoes of U.S. diesel headed for Europe, up 2.1 percent to 86.07 points, the highest since May 24.
Source: Bloomberg