The VLCC market experienced a volatile week, with TD22 rates initially rising by $350k before declining by $397k. The sentiment was influenced by the fluctuating Aframax and Suezmax markets, leading to resistance from Owners. Despite this, upward pressure was evident at the end of the week, reports CR Weber Research.
Suezmax
West Africa’s Suezmax market was quite literally a “Down and Up” week. After starting the week at ws102.5 levels, TD20 rates imploded back down into the mid ws80s by mid-week off the back of ample oil-company / trader relet length within the region which created an ephemeral dip in sentiment. However, this downward trend proved to be short-lived and reversed its course late in the week because of multiple named storms cutting across the USG and Atlantic basin regions.
WAFR, UKCM quickly rebounded back up to the ws100 barrier on Friday morning and settled at ws100 levels going into the weekend. We expect owners’ resistance to spill over into next week keeping rates elevated at current levels for at least the front half of the week. Demand in the Americas was steady this week, but rates fell initially at the hands of the relets sending USG>UKCM rates spiraling down into the mid ws80’s right out of the gates. This trend also didn’t last long as a pair of prompt replacement cargoes directly related to deteriorating weather in the mid-Atlantic catapulted rates right back up into the mid ws90’s by mid-week.
Aframax
After ending last week’s white-hot, the Aframax market in the gulf cooled considerably due to an oversupply of tonnage and charters opting to put their cargoes on Suezmaxes. After starting the week around ws210, USG>UKC ended at ws170 (Basis 70k MT). Despite a firmer Suezmax market in the region, do not expect the Aframax market to follow it just yet as the Aframax tonnage is still abundant.
MR
The CONT had a rather uneventful week as the route shaved off some points at the start of the week dipping down to ws80 but started to gain some traction during the end of the week to close it up at 37 x ws90. A handful of TC14 cargos came out to the USG market, a big run up in the early in the week peaking around 38 x ws230 but it would not last some of them failed.
The week closed after a massive drop on Friday to ws170. TC18 was much quieter but followed the same trends of building up in the beginning of the week to peak around ws290 before falling to down to ws250 at the close of the week (basis 38k MT). TC21 astoundingly followed the same trend and could be the culprit of the market falling mid-week. TC21 Peaked around $1.25m until another massive tumble on Friday which brought it to $775k.
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Source: CR Weber Research
