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Tanker market misery continues, VLCCs worst hit

Tanker market misery continues, VLCCs worst hit
No let-up in tanker market misery for owners of crude carriers with average VLCC earnings at less than $7,000 a day this year according to Clarkson Research. AG/West continues in negative territory. Suezmaxes are doing a little better with average earnings above $15,000 a day, while aframaxes are averaging $14,500 this year.

In terms of actual impact on companies, Teekay Tankers has just released its first quarter results showing a loss of $10m, which it attributed primarily to vessels coming off time charter into the weak spot market. Its suezmaxes in the Gemini pool averaged $13,821a day in the quarter, spot aframaxes $11,848, LR2s in the Taurus Pool $15,350, and a spot MR product carrier $8,405.

Last month, Euronav, a more purely spot player, reported a $10m loss with its VLCCs in the|Tankers International pool earning $21,000 and its spot suezmaxes $16,750.

Since then the position has deteriorated with Euronav reporting that its VLCCs started the second quarter at $12,300 a day though suezmaxes were showing stronger at $17,150 a day.

On the more positive side, Teekay noted that tanker deliveries in the first quarter, at 8.9m dwt, were the lowest for five years though removals were also low at 2.4m dwt. Since the start of the year there has been an increase in new tanker orders with 8.9m dwt ordered against 3.8m dwt in the first quarter of 2012 but the pace or ordering remains low by historical standards.

Teekay says the current tanker orderbook at 54m dwt is the lowest in absolute terms since second quarter 2001, and on a percentage of deadweight basis, the lowest since second quarter 1997.

Crude may be suffering but the rather better-looking prospects in products in the medium term have induced the Canadian operator to order four more LR2 product carriers for delivery in 2016.