May was quietest month so far this year says brokerNews // June 9, 2008
The spot market in the North Sea in May was the quietest month so far of the year with AHTS rates dipping to levels not seen for quite some time, said Offshore Shipbrokers Ltd (OSL) in its latest monthly report on the market.
"Though May is traditionally a quiet month, it would be fair to say this has produced far lower rate and utilisation levels than anyone would have predicted. By the end of the month, AHTS
undertaking rig moves, were being fixed at the £7,000 per day level which is the lowest rate level to be seen for these types of vessels since January 2006. This is a far cry from the £130,000 levels seen only a couple of months ago."
"Looking at the month in more detail, not all was doom and gloom, however," said OSL, "with the beginning of the month
seeing AHTS rates around the £15,000-£17,000 region."
By the end of the first week rates had picked up to around the £30,000 level but by the middle of the month had dropped off once again to around the £13,000 region. The third week of the month saw rates push back up to the £25,000 level but again this was short lived and by the end of the month had dropped off to the £7,000 level where they remain close to at the time of
The PSV market saw similar reasonable start to the month with rates around the £12,000-£14,000 level which had risen to around the £17,000 region by the end of the first week. This was not long lived, however, and rates quickly dropped off once again to around the £8,000-£10,000 level where they remained until the end of the month.
"Even given the sharp drop off in rates it would be foolish to suggest that we have seen the best of the market so far this year as the summer construction season is about to get underway which will see a number of vessels departing the North Sea. Looking at the annual rate graphs it is also clear to see that this dip in activity and day rates is not uncommon during May and undoubtedly many owners will be hoping for the traditional upturn in the market seen in June."
"On a positive note, the signs are there for continued buoyant activity from the operators with a healthy number of term requirements on the market and the oil price reaching new record levels, briefly touching US$135 towards the latter part of May. There can be no doubt that this price is speculation fuelled as stock/supply levels continue to be sufficient," said OSL.
"With the oil price remaining well about the US$100 mark, owners will undoubtedly remain confident of continued buoyant worldwide exploration activity, especially as demand increases rapidly from developing nations," the report concluded.