Caribbean Tanker Rates Fall

Caribbean Tanker Rates Fall as Oil Supplies Jump, Plants Slow
By Todd Zeranski
June 20 (Bloomberg)

Rates to ship crude oil from the Caribbean basin fell as a U.S. Energy Department report indicated oil stockpiles increased and refinery utilization rates fell.

Two Aframax tankers, which each can transport about 600,000 barrels of oil, were hired today for an average rate in the industry standard Worldscale 145, according to a daily report from Houston-based shipbroker Lone Star, R.S. Platou.

Valero Energy Corp. contracted one tanker to ferry crude between St. Eustatius and the U.S. East Coast, and Royal Dutch Shell Plc contracted a ship to transport oil from the east coast of Mexico to the U.S. Gulf Coast, according to Lone Star.

Demand in the region is hampered by low refinery operating rates. Refineries operated at 87.6 percent of capacity last week, the lowest since the week ended March 30, according to the department. It was the lowest utilization rate for the period in 16 years.

Crude-oil inventories surged 6.9 million barrels to 349.3 million in the week ended June 15, the report showed. It was the biggest one-week gain since the week ended March 19, 2004.

Worldscale 145 is equivalent to about $20,280 per day after expenses such as fuel and port fees, according to New York-based- broker Poten & Partners.

General Maritime Corp., the second-largest U.S. tanker owner, has a break-even rate of about $12,000 a day. The New York-based company operates many of its vessels in the Caribbean.

Overseas Shipholding Group is the biggest U.S.-based oil- tanker owners.