Christmas has come a week early for VLCC owners with spot rates pushing to the highest levels seen since March.
Morgan Stanley says VLCCs are earning $65,000 per day out of the Middle East for Asia, up by just over one fifth in the past week.
Analyst Fotis Giannakoulis explains the climb comes despite softer chartering activity in the past week.
“Limited tonnage in the region, coupled with anticipated stronger demand following the announcement of the Basrah January programme, has improved confidence among shipowners,” Giannakoulis explained.
Brokers at Howe Robinson Partners say sentiment is strong among owners as they await new stems from Saudi today.
“Next week is likely to be busy ahead of the holidays,” the brokerage said in a report in Friday. “With positions looking deliberately poised and suezmax in support, much now depends on the volume of requirement in the MEG and West Africa.”
Noah Parquette of JP Morgan explains it’s hard to say how much of this strength is regular seasonality and how much is from OPEC countries increasing production ahead of scheduled cuts at the beginning of the year.
“It’ll be interesting to see how crude tankers far in January given the scepticism around countries sticking to new quotas,” he said in a report this morning.
