The surplus of the largest oil tankers available to load cargoes in the Persian Gulf jumped to the highest in 11 months, a Bloomberg News survey showed.
There are 24 per cent more very large crude carriers for hire in the gulf for the next 30 days than there are likely cargoes, the median estimate in a survey of six shipbrokers and owners showed today. That’s a five percentage point increase from last week, and the biggest glut since October 4, prior survey data showed.
An increase in very large crude carriers (VLCC) bookings spurred rates for ships plying the benchmark route for the vessels to a two-month high yesterday, according to data from the London-based Baltic Exchange. Still, the surplus of ships persists as demand advancing 3.9 per cent this year will be outweighed by 6.9 per cent fleet expansion, according to Clarkson Research Services Ltd, a unit of the world’s largest shipbroker.
“The gains are marginal and VLCCs remain in the doldrums,” Erik Nikolai Stavseth, an analyst at investment bank Arctic Securities ASA in Oslo, said in an e-mailed report today.
Charter rates for VLCCs on the benchmark voyage rose two per cent to 37.17 industry-standard Worldscale points, exchange figures showed. Rates have slid 7.9 per cent since the start of the third quarter, exchange data showed.
The Worldscale system is a method for pricing oil cargoes on thousands of trade routes. Each individual voyage’s flat rate, expressed in dollars a ton, is set once a year. Today’s level means VLCC hire costs on the benchmark route are 37.17 per cent of the nominal Worldscale rate for that voyage.
Frontline Ltd, the world’s largest operator of VLCCs, fell the most in almost nine months in Oslo trading last week after forecasting deteriorating returns from carrying oil by sea. Its board expects a “significantly worse” operating result for the current quarter, the Hamilton, Bermuda-based company led by billionaire John Fredriksen said in a statement.