OPEC spot fixtures increased in August by 4%, after a sharp decline last month, averaging about 11.04 mb/d, up from 10.65 mb/d in the previous month.
OPEC spot fixtures increased in August by 4%, after a sharp decline last month, averaging about 11.04 mb/d, up from 10.65 mb/d in the previous month. Most of the increase is attributed to higher fixtures from the Middle East to West destinations which reached 1.05 mb/d for a gain of 0.15 mb/d while fixtures from the Middle East to East destinations increased to 5.11 mb/d, up by only 0.05 mb/d. In contrast, OPEC spot fixtures in August indicated a decline of 9% compared to the same month a year ago. Global spot fixtures in August were almost steady, with an increase of less than 0.5% compared to the previous month to stand at 17.55 mb/d compared to 17.98 mb/d in the previous month and about 4% lower compared to the same month last year.
The tanker market had a steady month in August with minor gains for both crude oil and product tanker freight rates. However, this general steadiness was in comparison to July, one of the weakest months thus far in 2009. Freight rates on most routes were once again at levels below breakeven cost throughout the month. The product tanker market performance was relatively better to the East of Suez compared to the West of Suez and in general the market continued its weakness of previous months in August. Suezmax freight rates gained an average of 4% in August. With freight rates climbing from WS43 at the end of the first week to as high as WS68 by the end of the fourth week, the Suezmax market for voyages to the US from West Africa had the best performance compared to all crude tanker routes in August. Freight rates on this route ended the month with a 10% gain compared to the previous month.
On the Northwest Europe to the US Suezmax route, freight rates also gained 6% in August as a result of a sudden tightening of the market during the second and third week of the month. On both routes, freight rates eased towards the end of August as a result of higher tonnage availability with a good number of vessels choosing to ballast into these regions.
Average Aframax spot freight rates were steady in August compared to the previous month. This was the result of a generally weaker market to the East of Suez, being offset by a slightly firmer market to the West of Suez. Reduced activity to the East of Suez brought Aframax freight rates down by 7% in August compared to the previous month, while in the Mediterranean market, Aframax freight rates gained 5% on average for both the cross-Mediterranean and the Mediterranean to Northwest Europe route. Freight rates on the Aframax Caribbean market ended the month unchanged from the previous month as the brief firmness during the first week of the month was lost throughout the remainder of the month amid lower exports of sour Caribbean oil grades.