Executive Briefings

Limited Number of Supertankers Affects Oil Sales to Asia

The window to sell Western fuel oil to Asia is starting to close as demand for a limited fleet of supertankers to store cheap crude pushes freight rates to multi-month highs, shipping and trade sources said.

Limited Number of Supertankers Affects Oil Sales to Asia

Crude prices have fallen nearly 60 percent since June and, with prices a year ahead already quoted about $10 a barrel dearer than now, crude traders have hired up to 20 supertankers to store oil with a view to turning a big profit later.

That also adds to the cost of selling fuel oil to Asia. The region has taken in high volumes of fuel oil from Europe and the Mediterranean this month, but with the cost of chartering a supertanker rising to highs not seen in at least a year, it is an increasingly less profitable trade.

That could suppress volumes from the West, which tend to make up about half of Asia's supply, and support premiums on the heavy distillates.

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Crude prices have fallen nearly 60 percent since June and, with prices a year ahead already quoted about $10 a barrel dearer than now, crude traders have hired up to 20 supertankers to store oil with a view to turning a big profit later.

That also adds to the cost of selling fuel oil to Asia. The region has taken in high volumes of fuel oil from Europe and the Mediterranean this month, but with the cost of chartering a supertanker rising to highs not seen in at least a year, it is an increasingly less profitable trade.

That could suppress volumes from the West, which tend to make up about half of Asia's supply, and support premiums on the heavy distillates.

Read Full Article

Limited Number of Supertankers Affects Oil Sales to Asia