Crude oil freight rates on major routes were mixed on Monday with tanker availability ensuring that rates in the Middle East market continued to hover around the operating cost level.

Crude oil freight rates on major routes were mixed on Monday with tanker availability ensuring that rates in the Middle East market continued to hover around the operating cost level.

The world's benchmark Very Large Crude Carrier (VLCC) export route from the Middle East Gulf to Japan DFRT-ME-JAP edged up to W48.85 or $10,316 a day, from W48.84 or $9,958 a day last week.

"For VLCCs, activity in the MEG was fairly steady with a good level of fixing having little effect on freight rates, which remain at dire levels," broker SSY said in a report.

Average earnings have been to around the operating cost level of $10,000 a day as VLCCs return from floating storage due to the end of a trading play, which at one point saw over 100 million barrels stored at sea.

While there are hopes for firmer rates in the fourth quarter of this year sluggish demand for crude oil, worries over economic recovery and rising fleet supply will pressure VLCC earnings in 2011.

Rates on that route had risen in mid August to their highest since July, helped by firmer demand and tighter tonnage.

Prior to that rise, Middle East VLCC rates had slid to their lowest since November in early August as softer enquiry and a build up of vessels hit on sentiment.

It had prompted tanker operators to anchor their vessels.

"Volumes have actually been maintained at quite reasonable levels, but availability has proved more than adequate, and sentiment amongst owners has remained compliant with the status quo," broker E.A. Gibson said in a report.

Maersk Tankers, part of Danish shipping and oil group A.P. Moller-Maersk, said it did not want to fix vessels below operating costs.

"The spot market right now is hovering at levels that are barely covering owners operating cost, and owners are starting to resist doing business at these levels," Maersk Tankers chief executive Soren Skou told.

VLCC rates from the Gulf to the United States DFRT-ME-USG were at W35.90 from W37.37.

Rates for smaller aframax tankers from the Caribbean to the U.S. Gulf coast were at W110.19 from W110.91 last week.

VLCC rates from West Africa to the U.S. Gulf were at W47.75 from W47.21 last week.

Baltic Exchange figures showed crude oil tanker rates from the Black Sea to the Mediterranean were at W75.14 from W78.88 last week.

Cross Mediterranean tanker rates were at W81.50 from W87.50.

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