The first week of September brings a downward movement in crude oil freight rates and a continued downward trend in VLCC tonne days demand growth. MEG -Rates for China have now fallen to their lowest levels since the beginning of this year, but there is still guarded optimism for a rebound in the third quarter of the year.It is interesting to see that the dependence of the Indian economy on Russian crude oil imports has been shown to be decreasing. At the end of the summer season, Russian crude oil exports to India reached their lowest level in August, a significant drop from earlier in the year (see chart above).

Concerns about the Chinese economic outlook and Asian oil demand are pushing oil prices down. Oil prices saw a decline on Thursday as concerns about seasonal demand slowdown during winter and the uncertain economic outlook for China took precedence over the anticipated impact of extended production cuts in Saudi Arabia and Russia. According to a Reuters report, at 0645 GMT, Brent crude futures declined by 36 cents to settle at $90.24 per barrel, signalling the conclusion of a nine-session winning streak. Concurrently,
U.S. West Texas Intermediate crude (WTI) futures slipped by 37 cents, resting at $87.17 per barrel, ending a streak of seven consecutive sessions of gains.

SECTION 1/ FREIGHT

Market Rates (WS)

‘Dirty’ WS​​​​ VLCC – Suezmax – Aframax Weaker

Weaker sentiment in crude oil freight rates, while the VLCC MEG – China route has seen a sustained downward trend since August. Whether there will be an upturn in September with the end of the summer season is still uncertain.

VLCC MEG-China freight rates fell to a level of around WS 37, down 25% month-on-month and the lowest level since the beginning of the year.

Suezmax freight rates for shipments from West Africa to continental Europe held at levels around WS70, with similar dynamics emerging on the Suez-Baltic-Med route and relatively flat dynamics in the first days of September.

Aframax Med freight rates fell below 100WS, down 7 points from two weeks ago, while we last saw weaker levels around 90 WS five weeks ago.

Source: Signal Group by Maria Bertzeletou