Demand for ME crude carriers hits record
Singapore, March 22, 2011
Demand for Very Large Crude Carriers (VLCC) shipping Middle East grades surged to a record in the spot market with more than 115 fixtures in March as Opec pumped more supplies, shipbrokers said on Tuesday.
With oil prices trading near $115 a barrel, oil producers have ramped up production to an all-time high of 89 million barrels per day in February.
Opec pumped 30.02 million barrels per day in February, up 110,000 bpd from the previous month, due to extra supplies from Saudi Arabia.
"March has been a record month in terms of demand for VLCC tonnage in the Middle East Gulf," said shipbroker BRS.
A second shipbroker said that as many as 120 VLCCs had been booked in March.
At least 97 of the cargoes were Asia-bound, with the rest going to the West, said shipbroker firm Meiwa International.
Activity in the VLCC spot market has surged in the last four months with fixtures averaging around 111 a month.
The unprecedented activity in the market, however, has not translated into higher freight rates.
The benchmark VLCC export route from the Middle East Gulf to Japan has tumbled 23 percent in the last month as a flood of new tankers more than offsets the increase in oil supplies. The market has also come under pressure from weakening Japanese crude demand following the devastating earthquake.
Rates traded at W63.03 on Monday, up from W62.82 the previous session. – Reuters