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    Broker detects improvement in North Sea spot market

    News // March 12, 2010

    The North Sea spot market saw a definite improvement in rates in February, says broker Offshore Shipbrokers Limited, with both PSV and AHTS averages rising.

    "Though the rises are only small it is still an encouraging sign that we are not slipping back to the 2,500 levels seen last year," said the broker in its latest report on the market. "For some PSV owners, with spot rates now reaching as high as 10,000 on occasion for medium PSVs, we are once again approaching the point where vessels can be put out to work at breakeven or even a slight profit rather than at a hefty loss."

    "Though it seems things are finally starting to look up it is perhaps still a little early for owners to be getting overly bullish. With the spectre of numerous newbuild vessel deliveries still hanging over the market we might find ourselves right back where we started if supply once again grossly outweighs demand as could well be the case later in the year," said the company.

    "Indeed," said the broker, "this was one of the topics discussed during a recent shipping conference in London and the general consensus amongst the majority of shipowners was that they are not overly optimistic for 2010 given this worry."

    On the positive, Offshore Shipbrokers Limited said the rig market still remains busy after the numerous rig fixtures seen during December 2009 and January 2010.

    "Though it is likely this was partly due to the build up of a backlog of projects as operators waited for the rate levels to fall, it would seem there is still a healthy stream of rig fixtures and fresh requirements to report," the broker reported.

    Looking at the global economy, which was another area discussed at great length during the recent conference, it was the case that during the end of 2009 the widely believed view was that the global recovery was firmly underway and the worst was behind us.

    There are, however, cracks starting to appear once again particularly in the Eurozone and US with growth slowing again and unemployment still rising.

    "Regardless of this however the oil price seems almost welded to the US$80 region," said the broker, "which continues to be a healthy level for oil companies, so overall it seems there are still both positive and negative factors affecting the vessel markets during the coming months and no‐one can predict with any certainty how things will work out."

    "It would be fair to say however that the majority view is that the worst is now likely behind us and that 2010 should be a little better than 2009 with all eyes firmly focused on 2011 for a return to normality," Offshore Shipbrokers concluded.


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