Showing posts with label Martin Stopford. Show all posts
Showing posts with label Martin Stopford. Show all posts

Monday, December 28, 2009

Tanker Glut Signals 25% Freight Decline as 26 Miles of Ships Meet Demand


A 26 mile long line of idled oil tankers, enough to blockade the English Channel, may signal a 25 percent slump in freight rates next year. The ships will unload 26 percent of the crude and oil products they are storing in six months, adding to vessel supply and pushing rates for supertankers down to an average of $30,000 a day next year, compared with $40,212 now, according to the median estimate in a Bloomberg News survey of 15 analysts, traders and shipbrokers. That’s below what Frontline Ltd., the biggest operator of the ships, says it needs to break even.

Traders booked a record number of ships for storage this year, seeking to profit from longer dated energy futures trading at a premium to contracts for immediate delivery, according to SSY Consultancy & Research Ltd., a unit of the world’s second largest shipbroker. Ships taken out of that trade would return to compete for cargoes just as deliveries from shipyards’ largest ever order book swell the global fleet.

“The tanker market has been defying gravity,” said Martin Stopford, a London based director at Clarkson Plc, the world’s largest shipbroker. Stopford has covered shipping since 1971. More than half of the ships are in European waters, with the rest spread out across Asia, the U.S. and West Africa. Lined up end to end, they would stretch for about 26 miles.....Read the entire article.

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