Not Logged In, Login,

Saturday, October 20, 2018

Commercial analysis




Spotlight on the aframax market

The aframax segment is the busiest tanker segment with almost 5,000 spot fixtures per year, or the same as the suezmaz and VLCC spot market put together. The fleet doubled between 1996 and 2011 and was steady for a couple of years but will probably increase somewhat both this and next year. There are still 17 aframaxes built in the 1980s left in the market, 72 aframaxes 20 years or older and 19...... Login to view this article


The changing energy market

Despite the world being to a great extent in turmoil both politically and economically, and despite a great deal of new oil that has been coming on to the market in the US, the oil price has remained remarkably steady for the past four years.  Average Brent oil price in 2011 was $111 per barrel, in 2012 $112, in 2013 $209 and so far in 2014 $208 per barrel.  This demonstrates the strong positio...... Login to view this article


A look at oil demand in 2014

The projected increase in oil demand for 2014 according to the Paris-based International Energy Agency (IEA) is 1.30 mbd. The graph below shows that 0.59 of the increase is in Asia Pacific of which 0.35 in China. Most of the remaining increases in demand are in oil producing regions, in particular the Middle East. The IEA has in its last monthly report upgraded its demand figures for 2014 due t...... Login to view this article


Moderate market prospects

Dave Saginaw, Commercial Director McQuilling Services LLC, gave a presentation to the INTERTANKO Council this week. In his presentation he stated that he expected tanker tonne-mile demand to be modest over the next few years - 1.5% for crude/DPP and 2.1% for CPP in 2014. The VLCC supply outlook was characterised as improving, with clean tanker supply rising strongly in 2015 and 2016 and a massi...... Login to view this article


The China Story

In the two previous Weekly News articles we looked at position of Russia and the US in the oil and tanker market. There is, however, no doubt that the biggest driver in the tanker market over the last 10 years has been China. The International Comparison Program, hosted by the World Bank, shows that China will overtake the US as the world’s largest economy later this year, a position the US has...... Login to view this article


US Oil –huge uncertainty surrounding production – import pattern changing

Future tight oil production in the US is the biggest wild card in the energy world at present. Long-term production forecast According to the latest long-term forecast from the US Energy Information Administration (EIA) its Reference case (see graph below) implies peaking production in 2016-2020, and then declining production for the rest of the period to 2040. However EIA’s High Resource case...... Login to view this article


Russia – an energy superpower

Russia is an energy super-power, the biggest oil and gas producer in the world and the biggest supplier of oil and gas to Europe. With this in mind, it is important to recognise that the oil production in the biggest world superpower, the US is set to surpass the oil production of Russia this year.   Russia has a vast, sophisticated energy infrastructure with export outlets in the Arctic, the...... Login to view this article


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

Related Articles


Bill Box
Senior Manager, Commercial
P: +44 20 7977 7023