Supertanker surplus shrinks on demand.
The supply of supertankers competing to haul cargoes of Middle East crude oil shrank as falling rates spurred demand. There are about 6 per cent more very large crude carriers (VLCCs) available than cargoes to haul over the next 30 days, according to the median in a Bloomberg survey of four people. That's down from 40 per cent last week, a seven- month high.
'Low rate levels have triggered some bargain hunting among charterers,' Oslo-based shipbroker PF Bassoe AS said in a report on Feb 19. 'March often means the onset of the slow season for VLCC activity, so much depends on how quickly Chinese activity revives after their New Year.'
Rental income from shipping Saudi Arabian crude to Japan, the industry's benchmark route, dropped 57 per cent this month to US$34,867 a day, according to the London-based Baltic Exchange. That compares with the US$32,900 that Frontline Ltd, the biggest operator of the vessels, says it needs to break even on them.
Charter rates for VLCCs rose 9.7 per cent to 74.56 Worldscale points on Monday on the Saudi Arabia-to- Japan route, the Baltic Exchange said. Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes.