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Friday, 27th August 2010

What will Suezmaxes earn in 2011?

In last week’s report we asked to what extent VLCC fleet growth was running ahead of oil demand, and how much it could afford to. This week we apply the same approach to the Suezmax sector.

Friday, 20th August 2010

What will VLCCs earn in 2011?

Cal 11 on TD3 is currently trading at around $35,000/day. It’s not a great return for a round voyage, but
given that TD3 managed just $24,500/day over the course of 2009, it could be a lot worse. Then again
we all thought 2010 would be weak, and we’ve averaged around $44,000/day so far. The question we
have to ask is… do the fundamentals, as we see them today at least, justify it?

Friday, 13th August 2010

New refineries: who wins?

Who is building new, or expanding existing, or closing old refineries, and where, and will it help product tankers, or crude oil tankers, or both? Not easy questions to answer, but the IEA’s outlook for crude distillation capacity additions (left) is a good place to start.

Friday, 6th August 2010

Chinese demand: keep the faith

Does a cooling economy spell the end of China's astonishing oil consumption growth? Hardly. But that doesn’t entirely let tanker owners off the hook.

Friday, 30th July 2010

Flat rates ‐ where do we go in 2011?

With only 5 months to go before we welcome in a new year, we thought we might take a look at a selection of projected 2011 WS flat rates. With only 3 months of average bunker prices needed to establish the rates for 2011, we now can calculate with a fair degree of certainty the estimated bunker price.

Friday, 23rd July 2010

What does 2011 have in store?

The big forecasting agencies have finally dared to look into 2011. The IEA is expecting global oil demand to rise by 1.3m b/d to 87.8m b/d. The EIA believes it will grow by 1.5m b/d to 87.3m b/d. OPEC reckons it will grow 1m b/d to 86.4m b/d.

Friday, 16th July 2010

Old double hull? No thanks

Who will take a 16 year old tanker on time charter? At the beginning of the last decade, pretty much anybody. Over 30% of all time charters involved vessels over 15 years old. Today – with a larger pool of younger ships to choose from and a growing fear among charterers of being implicated in an oil pollution incident - hardly anyone.

Friday, 9th July 2010

The great Suezmax gamble

So far this year 39 orders for Suezmax tankers have been placed at a cost of roughly $2.5bn. This brings the order book to 141 ships – 41% of the existing fleet. Newbuilding prices may have given ground in the past two years but this still represents a remarkable vote of confidence in the
outlook for Suezmax earnings. We wonder if this confidence is justified.

Friday, 2nd July 2010

Life after the single hull ban

Would the removal of the world’s remaining single hulls make the tanker fleet shrink in the second half of the year? Yes it would. Trouble is it is now clear that well over half the world’s single hull fleet isn’t going anywhere.

Friday, 25th June 2010

MRs: Back from the abyss

Over the past two weeks a moribund MR market in the West has leapt back into life. Rates for MRs moving gasoline from North West Europe to the US have jumped W52 points, lifting round voyage TCE earnings from little over $4,000/day (well below operating costs) to around $12,000/day (comfortably above opex).

Friday, 18th June 2010

What do they know that we don’t?

Oil is rapidly becoming ‘the new tobacco’ according to an influential UK paper this week. The view came as the slick created by the Deepwater Horizon explosion grows to what analysts believe could already be as much as 3.25m bbls – 13 times as much as the ExxonValdez.

Friday, 11th June 2010

Fleet growth: six months on

The question was raised this week as to how, if at all, our view of fleet growth has changed in the past 6 months. Since last December we’ve trimmed our delivery schedule slightly as on aggregate more delivery dates have been pushed back than brought forward.