Tankers

Crude
VLCC AG/East            42.5 (TCE $38k/day)  mildly softer
Suezmax Wafr/Usac  92.5 (TCE $47k/day)  mildly softer

A bit of good news is that we did see another 8 fixtures concluded yesterday – bringing the March total to 50. This makes clear the dangers of simple extrapolation – in that March, as a whole, looks a lot better today than it did yesterday. The bad news – as if any of us needed more – is that the conclusion of 8 AG fixtures did nothing to improve rates. Additionally, since we are working well into the third decade of March we cannot be sure just how many cgos are really waiting to be fixed. Demand is suspect.

Some fixture stats from the Good Doctor Kevin Sy of our Spore office: Since 1999, March has averaged 99.5 AG fixtures. The low was 86 in 2002, the high was 111 in 2001. The average for all months 1999-2008 has been 100.2. The year 2002 was by far the worst year – which averaged only 81.6 fixtures. OPEC production that year averaged about 25m bpd. January 2009 data shows that OPEC produced about 27.78 bpd. Todays V fleet stands at 525 vessels, while in 2002, the fleet contained only 420 vessels.

Those who are fascinated with black gold will take note of this comment from the ATS Report: “...if OPEC takes no action and defers any decision until May, this market will quickly test the low $30’s again. OPEC needs to get their house in order, but they still need to cut another 2 million b/d from their quota and actual production. They need to work off the 200 million in “contango” stocks.”

FFAs have traded down on moderate volumes. TD3 March has dropped 2 points to 40...a troubling development, but not as troubling as the Q4, which lost 3 points to ws 37 and is offered over at that level. Ws 37 equates to about $28k/day in TCE, which is not the end of the world....but, it’s an ugly number for a Q4 estimate.

Clean
37kt Cont/Usac       110 ($12k/day)      about same
38kt Caribs/Usac     102.5 ($10k/day)   about same
55kt AG/East          95 ($18k/day)        about same

Not much to report in the Atlantic Basin – as fair activity still exists, yet rates remain soft. The Blue Light Specials have brought Charterers back to the market – which has reduced the position list, though not to the extent needed to increase rates. In the East, the word “soft” applies across the board.

TC2 paper has been quiet. March sits at about 116 despite the spot value of 110. Something has to adjust. In the East, TC5 activity has been good. Though March loses a point to 96, April adds 2 points 103.