VLCC Ovatella crude oil tanker frontline

Crude Tanker Markets Supported by Demand, Clean Products Slow as Holiday Approaches

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December 13, 2011

SINGAPORE (Dow Jones)–Asia’s crude-tanker markets may stay supported on the back of healthy demand in the coming week, though upside is limited, as supply is also healthy.

The spot rate for a 260,000-metric-ton Very Large Crude Carrier from the Middle East to Japan was assessed Monday at Worldscale 57.74, down from the week-earlier level of W58.91, according to the Baltic Exchange. Cash earnings for owners were assessed at $14,457 a day.

Although fixture enquiries were brisk, with a steady flow of cargoes for the last third of December hitting the market, “tonnage in the region was sufficient to absorb the increased activity,” broker Simpson Spence & Young said in a note.

Meiwa International, another broker, said 129 cargoes have been fixed to be lifted this month, up from 110 lots a year ago.

Fixing of January-lifting cargoes will begin next week, but freight rates likely won’t change much due to balanced fundamentals, a Japanese broker said.

The spot rate for a VLCC from West Africa to China softened to W57.50 from W59.77, around its lowest in a month.

Also, the rate for an 80,000-ton Aframax from Southeast Asia to the east coast of Australia inched up to W103.83 from W103.11.

Freight rates for vessels carrying clean petroleum products have slipped over the past week, as fixing activities are slowing ahead of the holiday season.

“This is a typical December market…everyone is just going on holiday,” said a Singapore-based broker.

The rate for a 30,000-ton tanker from Singapore to Japan fell to W152.79, a two-week low, from W157.57 last Monday.

The rate for a 55,000-ton Long-Range-1 cargo from the Middle East to Japan eased to W120.54 from W123.77, while a 75,000-ton LR-2 cargo for the same route edged upward to W102.68 from W102.63.

-By Max Lin, Dow Jones Newswires

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