Friday, 5th March 2010

Different Expectations

More and more we hear our clients quoting the FFA forward curve as a reference for the direction of the physical market developments and not only as a tool to manage risk and hedge exposure. The front 4 qtrs traded in FFAs should tell us the expected TC rate, we hear more frequently stated and used as an argument.

Friday, 26th February 2010

The (a) Grand Unifying Theory

Despite a recovery in recent months, global oil demand is still some 1.3m b/d short of its peak at the end of 2007. Fleet growth since 2007 has required crude tankers to lift 2.84m b/d more crude, and product carriers to lift 5.92m b/d more products. So how on earth is almost every tanker in the world fleet still fully employed?

Friday, 19th February 2010

The Great Shift East

The Atlantic basin is awash with oil, yet Asia can’t get enough of it. Oil companies are therefore rapidly
shifting their focus. New pipelines are being built; flow of existing pipelines is being reversed; national
oil companies are swapping Western storage capacity for tankage in the Far East; Eastern owners are hoovering up the world’s tanker fleet. What could this all mean for long-haul tanker trades?

Friday, 12th February 2010

Ignore ton-miles at your peril

The question was raised this week as to whether the loss of tanker demand from Europe and North
America was being compensated by growing demand from China. Despite what the relative oil
consumption numbers suggest, the answer is a resounding ‘yes’ – but unfortunately for tanker owners, that’s not the whole story.

Friday, 5th February 2010

Storage update

Here are our latest numbers on oil in floating storage, showing our projection for oil coming off storage over the next two weeks.

Friday, 29th January 2010

Intermediate tankers: a prognosis for 2010

Though the global economic slowdown has clearly hurt the intermediate tanker sector (10,000dwt to 17,999dwt), the seeds of its decline were sown back to 2004. As a result it will take more than economic recovery to make up for past mistakes.

Friday, 22nd January 2010

VLCC rally: down but not out

The gains of the last ten days on VLCCs have quickly evaporated. As far as we can make out, that’s
largely down to sentiment.

Friday, 15th January 2010

Product Carriers: A prognosis for 2010

The cold northern hemisphere winter has picked product carrier earnings off the floor. Demand has
improved, weather delays have upset loading programmes forcing charterers to rush through
alternative arrangements, and ice class tonnage is at long last receiving premium rates. But not all the news is good. The rise in heating oil demand and hike in freight rates (particularly for Suezmaxes) has sucked gasoil out of floating storage, and if this begins to push LRs back into the spot market we will soon see greater competition for spot cargoes. Here is our view of how things will pan out over the course of the year.

Friday, 8th January 2010

VLCC: A prognosis for 2010

As the VLCC market starts to move, we look at the sector’s prospects for 2010 and against most peoples' expectation, conclude that we could see some strength returning to rates this year.

Friday, 25th December 2009

Beware January Deliveries!

January 2010 is shaping up to be a very busy month for newbuilding tanker deliveries. Generally weak
market conditions have already pushed a large number of 2009 deliveries into 2010. This trend has
accelerated in recent months as the appeal of a 2010 build date outweighs the benefit of participating in the small upswing in December rates. A good deal of this tonnage will come on stream in January, which we expect will put downward pressure on rates.

Friday, 18th December 2009

VLCC market strength explained

The VLCC market in recent times has strengthened and owners are fetching returns that for the most part of the year could not match. Supply/Demand enonomics are more in balance than they have been for many months and this has helped owners lift this market out of the doldrums. There has been constant demand for VLCC’s storing both Crude oil and Clean Petroleum Products.

Friday, 11th December 2009

Copenhagen: bad news for tankers?

The ‘peak oil’ debate has always had an inherent weakness. If and when conventional oil supply does eventually struggle to keep up with demand, the rising price of oil will justify the exploitation of more energy intensive ‘unconventional oil’ – Canadian tar sands and the like. But what if governments decide next week that the ecological cost of doing so is too high?