Freight rates for very large crude carriers (VLCCs), which rose to multi-month highs last week, could climb further if there is a flurry of pre-Christmas chartering activity, ship brokers said on Monday.
VLCC rates were also buoyed by a drop in the number of new vessels being delivered as owners deferred delivery from late 2016 to early 2017, brokers said.
“It should be busy this week because next week the Christmas parties start,” a European supertanker broker said on Monday.
But he said the number of charters contracted for loading in the first 10 days of December was lower than expected.
“The number of tankers available for charter versus the number of expected cargoes looks quite balanced. What’s missing is the additional cargoes to push rates higher,” the broker added.
Charterers were fixing cheaper vessels including older tonnage and newly repaired tankers which owners were willing to rent out a discounted rate.
“If owners of modern tonnage that command a premium can hold on then it will be good and we might just see 75-79 on the Worldscale measure,” a Singapore-based VLCC broker said.
A rush of fuel oil cargoes from Europe to Asia and bad weather in the Mediterranean which supported smaller Suezmax tankers also lifted VLCC rates especially in West Africa, brokers said.
“Our guys have fixed about five fuel oil cargoes (from Europe),” said Ashok Sharma, managing director of shipbroker BRS-Baxi Far East in Singapore. He estimated 10-15 fuel oil cargoes had been contracted in total.
VLCC rate from the Middle East to Japan stood at W70 on Friday, up from around W69.50 a week earlier. It surged to W72 on Nov. 23, the highest since May 11.
Rate for VLCCs from West Africa to China rose to W70.75 on Friday from about W67.50 the previous week. It climbed to W71 on Nov. 24, the highest since April 5.
Charter rate for an 80,000-dwt Aframax tanker from Southeast Asia to East Coast Australia rose to W98 on Friday, from W80.50 a week earlier. It hit W99 on Nov. 24, the highest since April 27, following a surge in fuel oil cargoes.