The VLCC market experienced a significant decline yesterday, with rates dropping by approximately USD 700,000 or 20% in a single fixture. This sharp decline followed a charter by NSRP at a flat WS 55 for a preferred Middle East Gulf/Vietnam voyage, which was significantly lower than previous market level, reports Fearnleys.
VLCC
While a recent MEG/Korea fixture at WS 54.25 might suggest a slight downward correction, there’s no cause for immediate panic. Typically, several fixtures are needed to establish a significant market shift.
Despite the recent fixture, the market remains behind schedule for the February MEG program, with March stems approaching. Furthermore, the position list indicates that WS 50 is unlikely to come under serious threat in the near future. The Atlantic position list has been growing, but the WTI/Dubai spread continues to favor Atlantic basin crude.
Suezmax
While the West African market may appear quiet on the surface, there has been significant activity under the radar, keeping the front end of the list tight and maintaining a relatively balanced near-term outlook.
On the other side of the Atlantic, a few cargoes in play and limited available tonnage have resulted in a substantial rate increase of approximately 6.25 points. Despite this rate jump, prevailing weather conditions in the Atlantic are discouraging owners from ballasting their UKC/Mediterranean vessels transatlantic on speculation. This is due to the expectation that the resulting TCE would be significantly diluted.
Aframax
The Aframax market remains relatively quiet with a significant amount of programming and combining of export stems observed.
In the Mediterranean, active tonnage is more willing to ballast, allowing owners to be more selective in choosing cargoes.
Rates have remained steady with a slightly firmer undertone. This trend could accelerate if more vessels leave the region.Rates have experienced a significant jump this week driven by strong demand.
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Source: Fearnleys
