A number of tankers carrying diesel fuel are floating off Taiwan and Southeast Asia, due to the fact that a sudden fall in oil prices kept buyers at bay. This development led rates to their highest since January 2016. Tanker rates also were also benefited by strong Chinese oil exports.
As Reuters reports, about seven to nine tankers with about 5 to 7 million barrels of diesel are floating off Taiwan waters, because of a reduction in bunker fuel demand from South China Sea.
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In fact, North Sea Brent and US crude reported their weakest month for more than 10 years in November, as each lost over 20% as global supply surpassed demand.
What is more, storage of clean oil products is also increasing due to weak demand for gasoline, which is now competing for tank space in onshore tanks.
The storage of oil products on board vessel led the rates on the benchmark Middle East Gulf to Japan route to about $30,000 a day. This is double of what it was a week ago and the highest since January 2016, according to Ralph Leszczynski, head of research at shipbroker Banchero Costa in Singapore.
In addition, the fact that China enhanced exports of oil products after it issued more export quotas for state refiners, also increased lift tanker rates, Reuters added.
