Forget ghosts and monsters. This Halloween, the scariest thing in the energy industry isn’t a one-eyed, one-horned, flyin’ purple people eater — it’s the tanker market, where a spooky jump in demand and frighteningly tight vessel supply have sent freight rates soaring. The culprit behind these hair-raising rates isn’t something lurking in the shadows, it’s a multi-headed monster of market disruptions: an unbalanced global fleet, mounting congestion in the Mediterranean, and a surge in vessel attacks. In today’s RBN blog, we look at how these forces are squeezing vessel supply and keeping freight rates at scream-inducing heights.
The Crude Oil Billboard keeps readers at the forefront of the U.S. crude oil market by offering access to data and information moments after its release. Say goodbye to PDF reports that come out after the market has already moved on.
Here at RBN, we regularly track crude oil tanker voyages and freight rates but it’s not a topic that has taken up much space in our blogosphere until recently. To help make sense of it all, we turned to our friends at McQuilling Services, a U.S.-based shipping consultancy that tracks and forecasts the tanker market. This is our second in a series on freight rates. In Part 1, we explored how stronger demand for long-haul crude shipments, a tightening supply of available tankers and other factors have sent freight rates soaring, with little relief in sight.
The cost to charter a Very Large Crude Carrier (VLCC) capable of carrying 2 MMbbl of crude from the Gulf Coast to Asia (red line and right axis in Figure 1 below) reached its highest point on record in early October at more than $80 million (equivalent to $40/bbl), although rates have fallen since then, dropping back below $60 million on October 21 and settling around $58 million on October 27. Prior to the start of the war with Iran earlier this year, the voyage cost typically ranged between $8 million and $14 million. However, once the conflict began and the Strait of Hormuz closed to normal traffic, freight rates became a lot more volatile. The cost to charter an Aframax from the Gulf Coast to Europe (blue line and left axis) has followed a similar pattern, dropping from about WS1,000 earlier this month to about WS720 over the same period. [Freight rates are expressed in total dollars per voyage or in Worldscale (WS) points, an industry-standard system that measures freight rates relative to a benchmark or specific route; for a more detailed explanation, see Part 1.]
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About the song
“The Purple People Eater” was written by Sheb Wooley and was released as a standalone single on MGM Records in May 1958. Wooley was inspired to write the song by a joke told by a child about a purple people eater. He wrote the song in less than an hour. America was rife with a fascination with outer space, science fiction, the atomic age, and rock and roll in 1958. The song tells the tale of a creature from outer space who descends to Earth to join a rock and roll band. It uses the same sped-up character voice that David Seville used on “The Witch Doctor,” and that Ross Bagdasarian used for his Alvin and the Chipmunks novelty records. The record gives a nod to three other popular novelty songs at the time: “Short Shorts,” “Tutti Frutti,” and “Tequila.” As a side note, hot rod and kustom cars started appearing in hues of purple and were named “Purple People Eater” after the song became a hit. The single went to #1 on the Billboard Hot 100 Singles chart and has been certified Gold by the Recording Industry Association of America. Personnel on the record were: Sheb Wooley (vocals, saxophone solo), Neely Plumb (musical arranger), and uncredited session players (musical accompaniment).
Sheb Wooley was an American singer, songwriter and actor. As a teen, he became an accomplished rodeo horse rider. At 19, he married Melva Miller, a cousin of fellow Oklahoman and future country music superstar Roger Miller, who taught Wolley how to play guitar. Wooley played in bands all over Oklahoma and Texas before moving to Hollywood in 1950. He immediately began working as a cowboy in Western movies. He released his eponymous debut studio album in 1956. In 1958 he had a #1 record with “Purple People Eater.” He appeared in 37 motion pictures and television serials beginning in 1950. He also recorded and performed under the name Ben Colder. He wrote the theme song for the hit television comedy series Hee Haw and appeared on the show many times. He released 18 studio albums and 24 singles and won two CMA Awards and two Golden Boot Awards. Wooley died in Nashville in September 2003 at 82.
"About the Song" -- written by Mickey McMahan , RBN Director of Musicology
