Oil companies and traders yesterday hired a total of 16 supertankers, each designed to ship 2 million-barrel cargoes, Mathieu Philippe, a shipbroker at Barry Rogliano Salles in Dubai, said by phone today. A total of 22 vessels have been booked for November loading so far this month compared with an average of about 95 bookings per month for the past several months, he said. Ship-rentals are referred to as fixtures.

"I can feel that owners are getting more and more excited and waiting for the next fixture to see if this market is confirmed," Philippe said. "We are down to figures that definitely tell us that it's not going to drop and if the pace is still up, we will see an uptrend very quickly."

Owners need increased oil supply and demand to offset the effects of a swelling supertanker fleet that's already expanded at a 5.2 percent pace this year, according to Lloyd's Register- Fairplay data on Bloomberg. Middle East members of the Organization of Petroleum Exporting Countries have cut their combined output by 2.8 percent to 19.3 million barrels a day over the same period, according to Bloomberg estimates.

Rentals rise

Rental income from shipping Saudi Arabian oil to Japan jumped 10 percent to US$23,228 a day, according to the London-based Baltic Exchange today. That represents owners' highest returns from the industry-benchmark voyage since July 7, according to the bourse.

Frontline Ltd., the world's biggest supertanker company, said Aug. 28 it needed US$31,900 a day to break even on each of its supertankers once crew, insurance, repairs, and finance costs are taken into account.

Charter rates may extend gains into the fourth quarter as cooling temperatures prompt refiners to import more crude oil so that they can produce extra heating fuel, Stephen Wang, a Taipei-based analyst at KGI Securities Co., said in an e-mailed report today.

Of the 16 bookings, nine were rentals for individual cargoes and seven were organized under contracts that oil companies have with shipowners, Philippe said.

"Sentiment is much better, though I thought it should have gone much higher by now with this amount of fixing," Halvor Ellefsen, a tanker broker at SeaLeague AS in Oslo, said by e- mail today.

Improved demand

Based on the Worldscale pricing mechanism that oil companies and tanker owners use to negotiate freight, charter rates on the Saudi Arabia to Japan route climbed 3.8 percent to 46.94 points, according to the Baltic Exchange. Ellefsen and Philippe both said rates may climb to 50 points in the next several days because of the increased demand.

Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.

Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.

Returns from leasing suezmax tankers that ship 1 million- barrel cargoes climbed 21 percent to US$18,768 a day, according to the Baltic Exchange. Aframaxes that haul 650,000 barrels dropped 1.8 percent to $2,559 a day.

"Owners are all united and determined to raise the market," Nikos Varvaropoulos, an official at Optima Shipbrokers Ltd. in Athens, said by e-mail today.