Persian Gulf Oil-Tanker Rates May Halt Gains As Demand Declines

The cost of shipping Middle East crude to Asia, up to 48% this week, may curtail further advances as a global recession and U.S. job losses cut fuel demand. Oil fell as low as 42 dollars a barrel in New York today, the lowest intraday price since January 4, 2005, as an economic slowdown crimped demand. A report today showed U.S. employers eliminated jobs in November at the fastest pace in 34 years. This week's rally in the cost of hiring very large crude carriers, or VLCCs, caused by demand for ships for storage, may "not last for long" because of the slowdown in oil demand, Nikos Varvaropoulos, an official at Optima Shipbrokers in Athens, said in an emailed note today, December 8, 2008.