Strong Market Continues

In 2000, VLCCs obtained S53.000 per day. up from less than $20,000 in 1999. Old VLCCs reached $33,000 per day compared with only $11,000 in 1999.

The freight market boom also had its effect on medium size crude carriers. After poor market conditions in 1999 with modern Suezmaxes obtaining $15,000 per day the average in 2000 was $40,000. Corresponding figures for modern Aframaxes were $13,000 as an average in 1999, reaching $37,000 in 2000. Peak rates in the year for both types were recorded in December at $60,000 per day.

Large clean carriers (LR2) last year obtained S32.000 per day. which is $18,000 higher than the 1999 level.

Modern MR types rose from S8.000 per day to SI6.000 per day in year 2000, with more than $30,000 in December.

Ship Values Secondhand values of tankers increased in line with the freight market, but there were large variations according to type and age. Given the booming freight market in the second half of the year both resale and secondhand values for most modern tankers exceeded newbuildings prices. With net earnings of more than SI million per month this was quite rational.

Post 1990-built crude carriers went up between 15 and 50 percent over the year. The strongest price rise was seen for Aframaxes, the weakest for VLCCs. The main explanation for these differences is the liquidity in the various segments. Another important point is that VLCC newbuilding prices for Suez- and Aframaxes were up to 17 percent. For product carriers built after mid-1980s we recorded price increases from 20 to 30 percent.

For older crude carriers values have risen by as much as between 50 and 80 percent. Older vessels will normally be subject to much larger relative price fluctuations than modern vessels, because current market conditions will be more dominating for the remaining lifetime.

Activities in the secondhand market were significant- ly higher in 2000 than in the year before, when transactions were at an extremely low level.

World oil production rose by more than three percent, or by 2.5 mbd. Middle East output was up as much as six to seven percent or 1.3 mbd, contributing strongly to the high growth in tanker tonnage demand.

OPEC's crude oil production surged by five percent, from 26.6 mbd in 1999 to 28 mbd in 2000. Tanker tracking data, however, suggest that seaborne liftings out of the Middle East have expanded more slowly than output. An increase in regional consumption may explain part of the gap, but certainly not all. We believe there has been substantial regional stockbuilding particularly in the second half of the year. In October/November 2000 most OPEC members were at full production capacity reaching an actual production of 29.4 mbd, compared with an estimated total capacity of 31 mbd. Only Saudi Arabia had significant spare capacity.

Seaborne Oil Trade World seaborne trade in crude and refined products based on export figures rose by four percent. Preliminary data suggests that crude transports were up almost six percent, while transports of refined products declined by more than one percent. According to R.S. Platou estimates, there was a moderate increase in transport distances from 1999 to 2000

Other stories from June 2001 issue


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