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North Sea market ‘has bottomed out’

Wed 02 Aug 2017 by David Foxwell

North Sea market ‘has bottomed out’
At times in July the market for PSVs and AHTS vessels in the UK and in Norway were both sold out

There is a growing consensus that conditions in the North Sea OSV market may have bottomed out.

Until recently, this sentiment has not translated into an increase in day rates on the spot market, however July saw a turnaround and turned out to be the most lucrative month of the year for owners. The spot markets for platform supply vessels (PSVs) and anchor-handling tug supply (AHTS) vessels both sold out in the UK and Norwegian sectors, albeit not at the same time.

“The arrival of the summer season has seen a sizeable increase in the number of rigs working in the North Sea, and the associated rise in the number of rig moves taking place has resulted in a flurry of fixtures in the £50,000-£80,000 (US$66,000-$106,000) range,” said Seabrokers.

“There hadn’t been a single AHTS fixture north of £50,000 since March prior to the increase in activity last month. The drastic reduction in spot supply due to layup activity has also played a role, with the market tightening extremely quickly when a few rig moves come along in quick succession.”

The broker said the same applied to the PSV market, where the seasonal increase in activity coincided with a raft of vessels departing for project work elsewhere (such as in Russia, West Africa and the Black Sea).

This allowed several owners to pick up fixtures with rates of £10,000 or more.