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Wednesday, April 16, 2014

Research and Projects




Deteriorating market balance?

The best news in the market at the moment is that the world economy appears to be recovering in rich countries such as the UK and the US. The International Monetary Fund (IMF) has virtually given these countries a clean bill of health and the US is again starting to act as a ‘locomotive’ for the world. Despite this the prospects for emerging economies, including China, have dimmed. China is usi...... Login to view this article


MR fleet expanding... but the same cannot be said of freight rates

According to Clarksons, clean MR earnings have on average declined in 2014 by almost US$3,000 per day to just over $10,000 per day. Last year 217 product tankers 10,000-60,000 dwt were ordered, mainly MRs, and about 10 new ones will be delivered every month both this year and next year. Some six owners have 10 to 40 tankers on order and another 40 owners have 2-8 tankers on order. According to...... Login to view this article


Tonne miles and falling rates

Rates have fallen back and activity in the VLCC market appears to be fairly low, this is after fixtures activity saw a record high in October last year and again in January. The above graph shows that March is, historically, a relatively busy month, generally being the 4th busiest month of the year, while activity then usually slows down in April. June is the 2nd slowest month of the year, with...... Login to view this article


Changes in oil world driven by the US

The above graph shows that consumption of all the main types of liquid fuels increased in the US in 2013. Total liquid fuels consumption increased by 0.4 mbd which was roughly the same margin it fell by in 2012. For 2014 liquid fuels consumption is expected to remain about the same as in 2013 The US-based Energy Information Administration (EIA) reported that world liquid fuels consumption in 20...... Login to view this article


Second-hand tanker prices on the increase

A significant indication of the stronger belief in the tanker market is the increase in second-hand tanker prices. After fairly low S&P activity in 2009-2012, S&P activity increased strongly in 2013 and the number of transactions for tankers 10-60,000 dwt was the highest ever seen. The high S&P activity has accelerated in the two first months of 2014 for all sizes and we have see that some owne...... Login to view this article


High oil prices drive the development in shipping

The high oil price has had a major impact on shipping in general and tanker shipping in particular. The high oil price has also to a great extent changed the political landscape in the world. OPEC revenues in the last 10 years were 306% higher than in the previous 10 years. In 2007 the US imported 10 mbd of crude oil and 3.5 mbd of oil products, while in 2013 the US imported 7.8 mbd of crude oi...... Login to view this article


More Russian oil goes East

Reuters reports that Russia’s biggest oil producer, Rosneft, will export an additional 9 million tonnes (180,000 barrels per day, or more than half China’s expected consumption increase in 2014) of oil to China this year and is continuing talks to increase eastbound crude supplies further, the company said on Thursday. President Vladimir Putin has made co-operation with energy-hungry Asia a...... Login to view this article


EIA confident of growth in liquid fuels supply as stockpiling increases

The US-based Energy Information Administration (EIA) forecasts that global petroleum and other liquids (or liquid fuels) supply will grow year-over-year by 1.7 million barrels per day (mbd) in 2014 and 1.4 mbd in 2015. In 2014, EIA expects a record high growth of 1.9 mbd in countries outside of the Organization of the Petroleum Exporting Countries (OPEC), with the US accounting for more than 50...... Login to view this article


Tonne miles for products show strong increase

The Lloyd’s Intelligence Unit tonne miles figures for product tankers show a phenomenal growth for product tankers of an average annual growth 7.5% over the last five years. In 2008, the average distance for product tankers bottomed out at 2,778 miles and it showed an upward trend until 2012 when it peaked at 3,811 miles. It went down by some 5% in 2013 and the increase in tonne miles was also...... Login to view this article


Crude oil tanker demand down, products tanker demand strongly up

Demand for tankers is best measured by using tonne-miles. Some years ago the only source for tonne-miles figures was Fearnleys in Oslo. Now several broking houses and others are calculating tonne-mile figures. The figures used in the below graphs are kindly provided by Lloyd’s List Intelligence. Tonne-miles for crude tankers have been relatively steady since 2005, although they did decline by...... Login to view this article


The changing oil market

Average oil prices have stayed above $100 per barrel for three years. We see that in previous years, high oil was to some extent related to low OPEC spare crude oil production capacity. Since the first quarter 2012 OPEC spare capacity has increased and has reached a relatively high level of some 5 mbd, but the oil price has remained above $100/barrel. One of the main reasons for the high oil...... Login to view this article


Product trades to OECD flat although Europe sees slight increase

Imports of products by Organization for Economic Co-operation and Development (OECD) countries have been fairly flat over the last couple of years as illustrated in the graph below. (2013 is a projection based on three quarters) The investment in product tankers was almost record high in 2013 and there is a strong optimism in this market. The biggest source of imports to the OECD countries (whi...... Login to view this article


Top charterers of 2013

VLCC. According to Poten & Partners, the Chinese charterers’ dominance in the VLCC spot market continued to increase in 2013 compared to 2011/12. UNIPEC, PetroChina, CPC and Sinochem increased the number of spot contracts from 525 in 2010, to 689 in 2011, 766 in 2012 and further still to 789 in 2013. The Chinese charterers, UNIPEC, PetroChina, CPC, and Day Harvest, together represented 37% of t...... Login to view this article


Number of incidents continues on its downward trajectory

Despite an ever-increasing fleet and the resultant increase in activity, the number of tanker incidents continues to decline and is down by a further 4% on 2013. It is also encouraging that we have recorded only a handful of small pollution incidents. The number of fatalities was also at a record low level in 2013. The worst accident was when the 3,927 GT chemical tanker Hua Jie 17 came into...... Login to view this article


A look at year-end figures for 2013

The first thing that springs to mind when reviewing the 2013 tanker market is the fact that the market unexpectedly went from rock bottom rates on Baltic route D3 AG – Japan in September, to above $50,000 per day primo November where it has since stayed. But this sort of improvement, while it brings temporary relief to some of our members, has by no means spread across the board. One of the...... Login to view this article


IEA revises its oil demand estimate upwards

In the latest oil market report, the Paris-based International Energy Agency (IEA) has revised its estimate for oil demand in 2013 and 2014 upwards. The forecast of global oil demand growth for 2013 has been revised upwards to 1.2mbd (or 1.3%), to 91.2mbd, on the back of stronger‐than‐expected delivery data for Europe and the US in recent months. A further gain of 1.2mbd is forecast for 2014, t...... Login to view this article


Just what is going on in the market?

VLCC rates jumped in October and have remained high ever since. Why? We have previously pointed to the Clarkson VLCC fixture data that showed the number of fixtures in October was at its highest for at least 10 years. We have also seen that one of the reasons for the high activity was the Chinese building up strategic oil stocks. McQuilling Services says that China is attempting to fill its...... Login to view this article


Are we seeing an ‘ordering spree’?

We have seen the freight rates’ spike in the VLCC market and we have also seen a cautious report from DnB that the VLCC market may be tighter than recognised given that distances covered have strongly increased over the last years. Long-term forecasts also indicate that distances covered by tankers may increase as India and China will take more oil from West Africa, Latin America; and the US wi...... Login to view this article


Increasing crude and oil product trades forecast with dramatic long-term changes in trade flows

The Paris-based International Energy Agency (IEA) project a changing of the geography of oil production and consumption as well as a growth in inter-regional oil trade from 44mbd in 2012 to 49mbd in 2035, broadly in line with the growth in global oil supply. The direction of trade flows in 2035 however, represents a dramatic departure from the patterns seen today, a shift that has implications...... Login to view this article


Changes afoot according to IEA’s World Energy Outlook 2013

The Paris-based International Energy Agency (IEA) launched its 708 page World Energy Outlook 2013 this week. Last year the IEA predicted that the US would be a net oil exporter by 2030, which helped bring shale oil production to global attention. But this year the organisation downplayed the significance of US production growth, calling shale product a surge, rather than revolution. Oil...... Login to view this article


Erik Ranheim
Senior Manager, Research and
P: +47 22 122 675