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Tanker Demand Rises, VLCC Rates Rise and Suezmax Fall

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Tanker rates

In the last part we saw how the Baltic Dirty Tanker Index changed over the last week. In this part, we’ll take a look at tanker rates. We’ll see which tanker performed better in week 18.

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Tanker rates

April saw a roller coaster ride for crude (DBO) tanker rates. As the weeks progressed, tanker rates fell, rose, fell, and rose again. In the first week of May, week 18, VLCC (very large crude carriers) rates rose by 62%. However, Suezmax and Aframax rates fell week-over-week.

VLCC rates

According to Weber’s weekly report, combined the Middle East and West Africa VLCC chartering demand was at a five-week high. This was mainly due to strong demand from China and other parts of Asia. A total of 37 fixtures materialized in the Middle East. This is a 37% gain week-over-week. The demand was high towards the end of the week. May 4 was the busiest day of the year. There were 22 fixtures in the Middle East in a single day. This boosted VLCC rates on the benchmark route to $49,031 per day on May 6 from $30,134 a week ago on April 29, 2016. DHT Holdings (DHT) and Euronav (EURN) primarily operate VLCCs.

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Suezmax rates

According to Weber’s weekly report, the Suezmax market was busy this week. The number of fixtures rose by two to 15. However, this didn’t boost rates. The rising availability of Suezmax vessels eased the rates. Suezmax rates on the benchmark route fell to $21,582 per day on May 6 from $26,468 per day a week ago on April 29, 2016. Nordic American Tankers (NAT) only operates Suezmax vessels. Teekay Tankers (TNK) and Tsakos Energy Navigation (TNP) have Suezmax vessels in their fleet.

Time charter rates

Although we saw the volatility in spot rates continue, the time charter market was silent. VLCC rates for a one-year time charter were constant from the previous week at $43,000. The Suezmax rates for a one-year time charter were constant at $42,500.

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