Poten & Partners predicts OPEC cut, expects further depressed VLCC rates

By the OGJ Online Staff

HOUSTON, Nov. 12 -- Poten & Partners said that the Organization of Petroleum Exporting Countries' proposed output quota cut does not bode well for very large crude carrier rates already experiencing low rates.

Spot VLCC rates are between $30,000 and $32,000/day, while time-charter rates are about $31,000. At the beginning of the year, both rates were about $48,000/day, said Poten, an oil tanker and liquefied gas carrier broker and consultant.

OPEC output is a main driver of demand for VLCC rates -- Poten said that OPEC production can explain 80% of the variation.

The consultant predicts OPEC production will continue to decline, though lowering production may encourage competition from non-OPEC countries. "The only thing that can preserve OPEC export volume is an expanding global economy, and that's not currently in the cards."

The consultant also said a critical factor is the number of VLCCs that can call on the Persian Gulf within 30 days. Demand for tankers' services determines day rates.

Related Articles

New York county puts freeze on Bakken crude

03/24/2014 Government officials in Albany County, NY, have issued a moratorium on Global Partners LP's plans to increase the processing of Bakken crude oil at...

HSC remains closed, fuel cleanup continues after barge collision

03/24/2014 The Houston Ship Channel (HSC) remained closed to unauthorized vessels Mar. 24 as the result of a temporary emergency safety zone being established...

OGJ Newsletter

08/19/2013

International news for oil and gas professionals

OGJ Newsletter

07/01/2013

International news for oil and gas professionals

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected