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Misery continues for large tanker owners

Misery continues for large tanker owners
The misery goes on in the large crude tanker sector with most routes delivering abysmal earnings for owners. VLCC earnings out of the Gulf last week were $6,000 a day or worse East and West.

Only West Africa/US Gulf bucked the trend, rather surprisingly for a trade that has all but disappeared, with just under $20,000 a day. Suezmaxes were also hit hard with only Med-Med voyages topping $10,000 a day. Aframaxes managed to put on a little weight with Gulf/East and Caribs/US Gulf around $20,000 a day but elsewhere it was a similar debacle. There are simply too many ships on the water and charterers can drip feed cargoes into the market to keep owners jumpy.

They are not the ones under pressure. Product carrier earnings have begun to recover a bit though not to the exalted levels of last year when the products story boosted a burst of newbuilding orders. LR1s and LR2s were up to $16,000 a day and $18,000 a day AG/Japan against year-to-date averages of around $10,000-11,000 a day. However, the Atlantic, which was the star of the show last year with earnings from $15,000-$20,000 on average is now struggling below $10,000 a day.

Falling US gasoline imports had a big part to play here as well as a sheer excess of tonnage.

While in the short term the supply side in the MR market will improve because there are a number of single hull vessels that must be phased out and a number of older tankers that might be retired, there is a tidal wave of newbuildings coming down the pipe.

Dirty product earnings, which tend to outperform clean product earnings are more or less holding up - average earnings on four key routes, according to Clarkson Research, are almost double last year's averages - and Caribs/US at close to $20,000 a day is looking particularly robust.

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