The cost to transport crude oil from the Caribbean on Aframax tankers fell, declining for the first time in more than a week amid light demand for voyages.
The cost to transport crude oil from the Caribbean on Aframax tankers fell, declining for the first time in more than a week amid light demand for voyages. 'The tanker market is relatively quiet,' Omar Nokta, an analyst at Dahlman Rose & Co in New York, said in a note. 'Activity is likely to be muted through the New Year, with reducing Opec production and depressed crack spreads globally hindering tanker demand. 'Aframaxes were hired for an average rate of Worldscale 335 on Tuesday, down 8.2 per cent from Monday, according to New York-based Poten & Partners. It's the first decline since Dec 17. Worldscale 335 is about US$82,000 a day after expenses, such as fuel and port fees. The slowing US economy has cut demand for gasoline, increasing stockpiles of crude oil and depressing the need for voyages. US oil inventories have climbed 11 per cent since Sept 19, according to a Dec 16 US Energy Department report. Inventories stood at 321.3 million barrels.
The crack spread, the difference between the cost of crude oil and the price of gasoline and heating oil, has fallen 75 per cent to US$5.071 a barrel from the 2008 record high close of US$20.514 on June 3.
Opec pledged on Dec 17 to reduce daily production by 2.46 million barrels from 11 of its members to 24.845 million barrels a day. The group may meet again before a scheduled March conference if prices keep falling, Venezuelan Energy Minister Rafael Ramirez said on Dec 23.
Worldscale points are a percentage of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in US dollars a tonne, are revised annually by the Worldscale Association in London to reflect changing costs.
The Caribbean is the world's third-largest Aframax-tanker market after the Mediterranean and Southeast Asia. An Aframax is the most common tanker used to move oil in the region. It can carry 600,000 barrels of oil.