Crude Oil Tanker Market Weakened, says OPEC
Crude oil tanker market sentiment weakened in April as average spot freight rates dropped on most reported routes, OPEC said in its latest monthly report.
On average, dirty tanker freight rates were down 8% from the month before. Despite a stronger market seen in the VLCC sector, average dirty spot freight rates declined, influenced by the declines in Suezmax and Aframax freight rates.
VLCC spot freight rates showed improvements, rising by around 17% on all reported routes, as a result of an active market and strong tonnage demand.
Suezmax and Aframax both closed the month down by 15% and 12%, respectively, as demand for both classes remained weak amid a persisting tonnage oversupply.
Following the drop seen last month, OPEC spot fixtures dropped in April by 4.2%. The decline came mainly on the back of lower fixtures registered for both eastbound and westbound destinations, while global fixtures declined by 2.9% from a month earlier.
Compared with a year ago, OPEC and spot global fixtures were down by 11.2% and 9.6%, respectively.
OPEC sailings were also lower in May, dropping from the previous month and a year earlier by 1.2% and 2.2%, respectively.
According to preliminary data, arrivals into North America and West Asia increased by 0.7% and 3.6%, respectively, from the month before, while arrivals into the Far East and Europe declined by 0.5% and 3.1% from the previous month’s arrivals.
Contrary to the other vessels in the dirty segment, VLCC freight rates increased in April from the previous month, rising by 17%.
In contrast, Suezmax freight rates encountered losses from the month before. Insufficient market activity during the holidays leading to increased availability supported the rate drops encountered during the month.
In the Aframax sector, spot freight rates dropped on all reported routes with no exceptions. In the clean tanker sector, spot freight rates were mixed as they increased on most reported routes with some exceptions.
