ASIA TANKER: VLCC rates at 52 week lows; Syrian impact unclear

Image courtesy Frontline

SINGAPORE (Dow Jones)–Asia’s crude-tanker market may stay in the doldrums due to a supply overhang, despite stable chartering activity for September-loading cargoes.

The spot rate for a 260,000-metric-ton Very Large Crude Carrier from the Middle East to Japan was assessed Tuesday at Worldscale 47.32, or minus $207 a day, down from the week-earlier level of W47.55, according to the Baltic Exchange.

“Despite good fixing activity, the rate failed to move much higher due to the long list of available tonnage,” said DnB NOR ASA said in a research note.

Oslo-listed tanker giant Frontline Ltd. (FRO.LN) said Friday that it swung to a $35.2 million net loss in the second quarter, citing prolonged weakness in freight markets.

While the upcoming European Union embargo on Syrian oil exports could provide support to freight rates for Mediterranean-Asia routes, as the country would need to find buyers in other regions, the impact isn’t yet clear due to Italy’s objection to the timing of the start of sanctions.

The rate for a VLCC from West Africa to China hovered around its year-to-date low of W43.15 Tuesday, as the 80,000-ton Aframax rate from Southeast Asia to the east coast of Australia fell to W94.67 from the week-earlier level of W94.89.

Firm naphtha demand continued to support freight rates for carrying clean petroleum products, though slower chartering of gasoline and middle distillate cargoes exerted downside pressure.

The rate for a 55,000-ton LR-1 cargo from the Middle East to Japan rose to W152 Tuesday from W145.19 a week ago, but the rate for a 75,000-ton LR-2 cargo for the same route fell by 0.58 to W124.30.

The rate for a 30,000-ton tanker from Singapore to Japan fell to a one-month low of W155.96 Monday, versus its week-earlier level of W158.57.

-By Max Lin, Dow Jones Newswires

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