VLCC Rates Bounce Back With A Vengeance

Rates for eastbound VLCC cargoes of crude oil made a sudden comeback on Tuesday, with the Tankers International alliance booking out three of its ships at more than 30 percent over Monday's market rate, brokers said.

"VLCCs have managed to claw back some of what they've lost," said a London broker. "The big game is for the early ships, for the first few days of September. For dates around the 12th we're looking at low to mid fifties," he added.

Tankers International fixed out two VLCCs for eastbound loadings on September 1, one to Texaco and one to Thai Oil at a rate of W60. Another went to Singapore Petroleum Company for September 2 loading at the same rate, equating to $0.52 per barrel.

The overall increase in costs for charterers since Monday could be as high as 16 cents on the barrel for shipments to Southeast Asia.

Tankers International is a pooling alliance between five of the world's biggest tanker owners: Frontline, OSG Group, AP Moller, Euronav and Oldendorff. It currently controls 53 of the world's 200 VLCCs.

Most analysts have predicted a downturn in tanker earnings in September when OPEC cutbacks are expected to severely impact tanker demand. - (Reuters)