Tanker Report: Slow Demand For VLCC; Aframax Go Down

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Fearnpulse summarises the weekly tanker report for the week 26, 2024.

VLCC

The summer doldrums continue. Slow demand, Chinese ships for Chinese cargoes, and many other deals remain mysteries with no rates reported. The few deals with details attached sees MEG/East ticking down into the high WS 40’s. However, it is not all doom and gloom. The MEG volume count is normal for this time of year, rates are often softer and the paper numbers for 2nd half 2024 are trading WS 62. Owners need to ride out the summer.

As for the Atlantic market, there is a possibility of an SPR release to ease gasoline prices prior to the driving season, but this will be for domestic consumption. Additionally, there is little incentive for spot barrels West to East now due to recent strengthening and steepening backwardation in Brent and WTI pricing. Petrobras a lot quieter for Far East discharge than previous months and any USG activity is noticeably quieter. Rates for USG/Ningbo soft around the USD 8m level.

Suezmax

The arb for West/East moves is more or less shut which will see the majority of Atlantic basin barrels stay local. Focusing on West Africa, there remains a glut of unsold barrels which suggests there will be some prompt requirements that will help support rates with TD 20 currently trading last done at WS 112.5.

Across the pond, the softening oil price will not bring about an SPR release anytime soon, therefore any uptick will have to come from other sources.

In the East, despite a flurry of enquiry, tonnage is beginning to build and on that basis we are calling MEG/East WS 115-120 and BOT/UKCM WS 60-65 via Cape.

Aframax

The North Sea market has had to tolerate a lull in activity this week and it feels like it’s poised for a further downward correction. The tonnage in the region looks balanced with relets and local ships off the front end and a steady flow inbound off the back of TA runs. With the lack of activity, vessels continue to ballast to the USG despite the softer correction over there.

An active week in the Mediterranean with a number of fixtures enabling a necessary clear out of units. Rates have repeated off the right dates and the tonnage list has thinned as the market looks to turn around. Summer market is still governing the region for the time being, but things could get interesting as we move forward.

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Source: Fearn Pulse