Black Sea tanker rates may extend gains on fuel demand, delays
The cost of shipping 1 million-barrels of crude oil from Black Sea ports, which almost doubled last week, may extend gains as refiners begin January bookings.
Oil demand is at its highest in the northern hemisphere winter as consumption of heating fuels peaks. Russia, whose Urals-grade crude is prized during the colder months for its high yield of heating oil, tells buyers when cargoes are due to load about three weeks in advance. „In three to four days, the Russian program will be published so we may see a real picking-up again,” said Pablo Mastragostino, a broker with Nolarma SRL in Genoa. Freight rates fell 5% yesterday to 205 Worldscale points, having reached a 10-month high of WS 215.4 on December 14, according to London's Baltic Exchange.
Shorter daylight hours are also holding up traffic from the Black Sea into the Mediterranean through Turkey's Bosporus Straits, according to Dimitris Tsahalis, chartering manager for Thenamaris Ship Management Inc. in Athens. Slower progress is adding about 14 days to a round trip through the waterway, he said. Worldscale points are a%age of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in US dollars per metric ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates. Russia, the world's second-biggest oil exporter, will reduce its export tax on crude by $7.76 a barrel for shipments in December and January to encourage buying.
Tankers that carry 1 million-barrel shipments of crude oil are known as suezmaxes. Based on a rate of 210 Worldscale points, operators of double-hulled suezmax vessels can earn about $105,706 a day on the 12-day round trip between Novorossiisk and the Italian port of Augusta, Sicily, according to a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg bunker prices. Frontline Ltd., the world's biggest tanker company by capacity, said on November 28 that it needs to make $22,600 a day on each of its suezmaxes to break even. (Bloomberg)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.