Tanker charters at 17-month low as China demand slides
By Rob Sheridan
18 July 2012 The largest oil-tankers booked to haul 2 million-barrel cargoes of crude from ports in the Persian Gulf are poised to slump to a 17-month low as a slowdown in the world’s second-largest economy curbs oil demand. Charters of very large crude carriers to ship Middle East crude will probably fall by 10 percent from June to 115 shipments this month, the lowest tally since February 2011, Kevin Sy, a Singapore-based freight-derivatives broker at Marex Spectron Group, said by e-mail today. A reduction in bookings to China will be the biggest contributor to the slump, he said. The Asian country’s economy slowed for a sixth quarter, the National Bureau of Statistics said July 13. China grew 7.6 percent last quarter from a year earlier, the data showed. The pace, a three-year low, compares with an 8.1 percent gain in the previous period, the data showed. Concerns that embargoes on Iranian oil cargoes could disrupt crude supplies helped boost tanker bookings in November and December to the highest since January 2011, according to Marex Spectron data. “The downturn in charters to China is a function of vigorous stockpiling and a slowdown in Chinese economic growth,” said Nigel Prentis, London-based research director at HSBC Shipping Services Ltd. “It’s maybe a reflection of weakening final demand, certainly over the rest of this quarter.” China bought 5.28 million barrels a day more crude than it exported last month, customs data show. That’s the least since net imports of 5.1 million barrels a day in December and compares with a record high of 5.98 million barrels a day in May, according to data compiled by Bloomberg. The world’s second-largest oil consumer built a surplus of about 90 million barrels in the first five months of the year, its fastest stockpiling since the run-up to the 2008 Olympics. China is constructing about 207 million barrels of storage capacity in the second stage of a plan for strategic reserves to help it manage price swings. The country finished building four sites in 2009 under the first phase of the reserve that can hold about 103 million barrels. About 207 million barrels of storage capacity at eight sites will be built for the second stage, China National Petroleum Corp. said in its February report. Third-phase facilities are still being planned. […]
