Aframax Rates Are Collapsing

After more than a week of slow trading, Aframax tankers (70,000 tonners) are piling up in the Caribbean, sending rates crashing by over 35 cents per barrel in the last 48 hours, said brokers in the U.S. and Oslo. "It's just fallen through the floor," a U.S. broker said. "Right now, it's W175, maybe W180 ($1.28 per barrel)." But Oslo brokers said on Friday morning that one ship from the fleet of U.S. tanker giant Teekay had been fixed lower, at W170 ($1.21 per barrel), for a Phillips cargo to the U.S. Gulf. Another had been fixed at W160 to Exxon for the longer journey to Halifax, Canada. This compares to levels of about W225 ($1.60 per barrel) on Wednesday, and over W300 ($2.13 per barrel) a month ago. Another broker explained the slump as a "simple supply and demand thing." He said that there had been relatively few cargoes on the market in the past 10 days, and that Aframaxes (70,000 tonners) were piling up in the Caribbean in the hope of finding fresh employment. The situation was playing into charterers' hands. "Exxon's got 10 offers in on the one cargo," he said. London's Baltic Exchange pegged the upcoast Aframax route (70,000 ton cargoes from Venezuela to Corpus Christi) at W187.5 on Thursday evening, compared to W224 just two days ago. - (Reuters)