ECONOMY

Freight rates’ good spell seems in for long haul

US shipping freight rates looked like extending their good spell in the last 10 days of April, rather than falling into the traditional seasonal decline in springtime. Usually in April, rates show a small decline compared with winter levels, while recent data showed that this year the average has moved higher than in other years. Nevertheless, it was clear that the chartering rates market of Very Large Crude Carriers (VLCCs) showed signs of declining. Analysts believe that this makes no difference to the market’s direction, as this is attributed to the aforementioned seasonal decline. The level of use of US refineries is higher this year compared with last. Usually during the summer period, refinery use moves higher due to the seasonal rise in product demand, resulting in the significant consumption of crude oil quantities and the ensuing rise in imports to replace oil reserves. Gasoline consumption has recently shown a gradual increase in spite of comparatively higher retail prices. Recent statistics showed an increase in gasoline demand in the US by 2.5 percent compared with the previous year, although corresponding prices are higher by at least 5 percent. It is certain that the clean products market has been moving northward in the last few months, with an increase in production and products trading internationally, as crude oil imports are at the same level as they have been in the corresponding period of previous years.