VLCC spot rates set to climb after Chinese holidays.
SPOT rates for very large crude carriers shipping Middle East crude to Japan are set to rise this week as oil traders return to work following the Chinese New Year celebrations and International Petroleum Week in London.
Analysts and brokers expect oil traders will want to fix VLCCs quickly this week to cover their March Middle East loadings before other charterers fix away the shrinking supply of available modern double-hulled tankers.
?We expect there will be a flurry of fixtures and the rates will come back up,? said a freight derivatives broker from Imarex Asia.
At the end of last week, the supply of available modern double-hulled VLCCs was in balance, with the expected number of Middle East loadings in the first 10 days of March.
Imarex Asia said out of the 42 VLCCs ready to load up until March 10, only 25 were 10 years old or younger and four double hulls were more than 10 years old. This is compared with expectations that 22 VLCCs will be needed to load early March cargoes.
?An increase in VLCC requirements from the Middle East with strong Atlantic activity leaves us to believe that rates have bottomed out at current W60 levels,? Lorentzen & Stemoco said in a report. On Friday, the rate on the Baltic Exchange"s TD3 route ? VLCCs shipping Saudi Arabian crude to Japan ? was W68, or $28,460 per day.
Gibson analysts said owners had lifted rates to W70 for eastbound Middle East crude exports at the end of last week because ?charterers started to get itchy feet [to cover] their early March positions?.