LONDON (Bloomberg) — Bermuda-based Frontline Ltd., the world's largest operator of supertankers, expects returns to improve in the next quarter from the current period as supply and demand start to shift in owners' favour.

"We've reached the bottom," Jens Martin Jensen, Singapore-based chief executive officer of Frontline's management unit, said by phone. "There's more activity. We see more action in the Atlantic market."

Rental income from hauling Saudi Arabian oil to Japan, the benchmark voyage for crude tankers, has slumped 78 percent to $8,862 a day this year, according to the London-based Baltic Exchange. It advanced 3.5 percent on Friday.

Returns have been below the $11,601 that Drewry Shipping Consultants Ltd. estimates owners need to pay crew, insurance, repairs and other running costs, since August 24. Frontline requires $30,900 to break even on the ships once finance costs are included.

Worsening weather conditions can delay tankers during the Northern Hemisphere winter, meaning fewer of the vessels are available for hire. Refineries also accelerate processing of winter fuels during the fourth quarter, bolstering their demand for imports.

Owners would require increased demand for tankers to be used for floating storage to return earnings to levels seen in the first half of the year, London-based EA Gibson Shipbrokers Ltd. said in an e-mailed report on Friday.

"The tonnage oversupply is putting massive pressure" on earnings for very large crude carriers, or VLCCs, Gibson said.

"Any upturn in the number of cargoes will not be enough to cover the growing VLCC fleet."

The Baltic Dirty Tanker Index, a wider measure of crude-oil transportation costs that spans smaller ship sizes, rose one percent to 687 points on Friday, according to the exchange.