OPEC may be extending the longest stretch of output cuts since the 2009 global recession as fewer oil tankers are booked to ship Middle East crude to Asia, according to Morgan Stanley.
Hiring of supertankers from the world’s largest export region slumped 33 percent from a year ago, Fotis Giannakoulis, a New York-based analyst at the investment bank, said in an e- mailed report today. The 12 members of the Organization of Petroleum Exporting Countries already cut production for five months, most recently by 1.7 percent to 30.5 million barrels a day in January, estimates compiled by Bloomberg show.
“Chartering activity in the Middle East has collapsed during the last four weeks, indicating a steep drop in oil production,” Giannakoulis said. “The decline is a signal that OPEC output might be also moving lower.”
Expanding production from shale rocks in North America and slowing growth in Europe are curbing demand for OPEC cargoes. The International Energy Agency cut its forecast for demand for the group’s supply by 0.3 percent to 29.7 million barrels a day in a Feb. 13 report. The U.S. will overtake Saudi Arabia as the biggest oil producer in about 2020, the Paris-based agency predicts. Euro-area economies will contract 0.1 percent this year, economists’ estimates compiled by Bloomberg show.
Near Record Low
Rates for very large crude carriers hauling 2 million- barrel cargoes of oil are near the lowest for figures going back to 1997 from Clarkson Plc, the world’s biggest shipbroker. The ships are making $7,518 a day, 3.6 percent above the record low in September 2011.
There are 23 percent more supertankers in the Persian Gulf for charter over the next 30 days than cargoes, according to the median estimate of six shipbrokers and owners in a Bloomberg News survey today. That was down 1 percentage point from last week, when the surplus returned to the level first reached Jan. 29, the biggest since Sept. 5.
The excess came to 15 percent in this year’s first survey on Jan. 8.
Charters of VLCCs to haul Persian Gulf oil will probably fall 11 percent this month to a two-year low of 110, Kevin Sy, a Singapore-based freight-derivatives broker at Marex Spectron Group, said by e-mail today. There were 109 bookings in January 2011, Marex Spectron data show.
Average daily earnings for VLCCs will fall 10 percent this year to $17,300, Morgan Stanley estimates. Demand will advance 2.2 percent, the least since 2009, as the fleet swells 5.3 percent to a record 191.1 million deadweight tons, according to the bank’s forecasts.