Freight for transporting crude oil from the Gulf hovered at the lower levels on Friday amid a build up of spare tonnage, though shipping brokers said the market had probably hit a floor.
They said typical Very Large Crude Carriers (VLCC) on the bellwether route from the Gulf to Asia were stuck at around W85 and W75 to the United States. Prices have hung around those levels for the last few sessions, despite a good level of activity with 31 bookings out of the Gulf this week, brokers said.
"Levels are probably now at their lowest, for the near future. With only 16 modern units capable of loading within the next 30 days there is potential for some improvement for tight positions," E.A.Gibsons tanker brokers said.
Some core export routes out of the Atlantic have been similarly downcast, though routes were expected to echo the recovery in the Gulf. Million barrel tankers out of West Africa were trading around W155. VLCCs have held firm compared with the Gulf with typical journeys to the United States paying W115 and W90 to Asia.
The Mediterranean aframax, 80,000 tonne market, remained weak with rates now around W125 and the potential for further slippage due to a backlog of tonnage in spot positions, brokers reported. Suezmax interest was also limited and rates appeared to have bottomed out at about W130 for cross-Mediterranean trading. A VLCC was fixed at WS 125 for a similar voyage.
In the Caribbean, trading was uninspiring and with the approaching Labor Day weekend rates dropped to around W145 for 70,000 upcoast voyages.