BEIJING: China VLCC speeds increased by 6.7 percent due to falling oil prices, according to data from RS Platou Economic Research, an Oslo-based firm. Very large crude carriers, each about 1,000-feet long and able to transport 2 million barrels of oil, sailed at an average of 12.57 knots this month.
The speed for the ships when voyaging without cargoes rose 10 percent over the same period to 13.31 knots.
Tanker rates have surged amid signals that China accelerated purchases of crude to fill its stockpiles after Brent crude, the global benchmark, collapsed last year. Prices plunged in part because the Organization of Petroleum Exporting Countries pledged to keep pumping oil amid a global oversupply. The ships earned an average of more than $71,000 a day since the start of January, the best start to a year in Baltic Exchange data that begin in mid-2008.
“Freight rates are high because there’s a lot of oil trade at the moment,” Frode Moerkedal, an Oslo-based analyst at Platou Markets, an investment adviser linked to the research company, said by phone on Thursday. “OPEC has refused to cut production so there’s more oil being shipped.”
The daily average rate to hire a VLCC on the benchmark Middle East-to-East Asia route was $71,772 so far in the first quarter, compared with an average of $47,614 in the fourth quarter, according to Baltic Exchange data.
Vessels Value Ltd., a London-based firm that provides shipping data, also estimates VLCCs are sailing at the fastest since 2012. The acceleration is in part because falling oil prices have cut fuel costs and made it more profitable for owners to transport cargoes, said Kaizad Doctor, analytics director. Ship fuel is known as bunker.
“This can be attributed to the simultaneous decrease in the oil prices and the consequent reduction in bunker prices but also due to the increase in rates caused by the Chinese re-stocking cut-price crude,” Doctor said.
