Tankers Rebound in November
In November, tanker spot freight rates for dirty vessels showed a significant increase as rates continued to rise from the previous month, as per the latest monthly report from OPEC. Average spot freight rates increased for the third month in a row, showing a gain of 21% on average from the previous month. Freight rates for all classes in the dirty segment of the market increased on all reported routes. VLCC spot freight rates went up from the previous month, supported by increases in tonnage demand in major trading areas. The Suezmax class also benefited from a firming market, showing higher levels of increases in spot freight rates supported by a tightening tonnage list and increased transit delays in the Turkish Straits. Similarly, Aframax freight rates edged up in November, mainly as demand and rates in the Mediterranean and US Gulf Coast (USGC) surged. Additionally, delays in the Turkish Straits reduced the supply of vessels and raised freight rates significantly on a monthly and annual basis. Clean tanker spot freight rates also showed gains in November, benefiting from seasonal demand and higher chartering activities in both the eastern and western directions of Suez. Tanker market earnings in both the dirty and clean sectors were enhanced in November on the back of lower bunker prices, thus reducing operational costs
In November, OPEC spot fixtures were up by 1.3% from the previous month to average 14.51 mb/d, according to preliminary data. The increase came at the same time as fixtures from the Middle East-to-East increased by 8% from one month earlier, while fixtures from both Middle East-to-West and outside Middle East declined by 2.3% and 7.8%, respectively, from a month before.
Sailings and arrivals
OPEC sailings increased by 0.55 mb/d, or 2.2%, m-o-m in November to stand at 25.26 mb/d. This was supported by an increase in Middle East sailings, which rose by 0.55 mb/d, or 3.0%, over the previous month to average 18.51 mb/d.
Crude oil arrivals were higher in Far Eastern and West Asian ports, rising m-o-m by 0.09 mb/d and 0.03 mb/d, respectively, while arrivals at North American and European ports dropped m-o-m by 0.44 mb/d and 0.24 mb/d, respectively, in November.
Dirty tanker freight rates
Very large crude carriers (VLCCs)
In the dirty tanker market, VLCC spot freight rates continued to strengthen, showing further gains from one month earlier. The VLCC market showed obvious signs of recovery starting in mid-November.
VLCC average spot freight rates increased by 14% from one month before. On average, VLCC spot freight rates stood at WS75 points, up by 37% from those registered in the same month a year earlier.
VLCC Middle East-to-East spot freight rates went up by 12% m-o-m in November to stand at WS93 points, followed by freight rates registered for tankers trading on the West Africa-to-East route, which rose by 13% to average WS91 points.
The VLCC spot freight rates on the Middle East-to-West route showed similar gains, rising by 24%, or WS8 points, m-o-m to average WS41 points.
Suezmax freight rates have shown increases for three months in row with remarkable gains recorded in November across all reported routes.
Rates surged on all major trading routes from a month before, remaining well above those of the previous year. November tonnage availability tightened and market activities experienced their usual seasonal uptick. The Suezmax market saw further gains from the previous month as the market kept strengthening in several areas, including the Black Sea, West Africa and the Mediterranean. Furthermore, November freight rates were strengthened by increased delays in the Turkish Straits.
Average Suezmax freight rates remained healthy, supported by higher rates registered for tankers trading on the Northwest Europe (NWE)-to-USGC, which gained 50% m-o-m to stand at WS101 points in November.
Similarly, an increase of 63% was seen over rates for the same month in 2017. Moreover, Suezmax spot freight rates for tankers operating on the West Africa to-USGC rose by WS27 points from a month before to stand at WS120 points, higher than those of the same month a year before by 52%.
Average Aframax spot freight rates showed gains as seen in larger vessels in the dirty tanker sector. Increases were seen on all reported routes. And average Aframax spot freight rates showed worthy gains in November byWS160 points.
Spot freight rates on the Mediterranean-to-Mediterranean and Mediterranean-to-NWE routes were the main contributors to the average rate increases. Both routes reflected higher rates, by 20% each, respectively, from the previous month to stand at WS155 points and WS144 points. This reflects an increase of 51% and 46%, respectively, from the same month in 2017.
Spot freight rates for Aframax operating on the Caribbean-to-US East Coast (USEC) increased by 11% from last month to recover to WS210 points.
Meanwhile, spot freight rates for tankers trading on the Indonesia-to-East route showed relatively lower gains, rising by 8% m-o-m to stand at WS133 points in November.