Crude Oil Tanker

July 14, 2017

The Research Team gives its view on the crude oil tanker market


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11 July 2017 

  • We still see the short-term tonnage supply conditions as bullish, but our conviction has declined significantly in the last 10 days.
  • Persistent contraction in the fleet turnaround time, as indicated by our Dynamic Turnaround Time Modulation Factor, appears to provide some support to rates as more capacity is likely to be withdrawn from the market during weeks #28-29. On the other hand, our Supply Pressure Index turned bearish which is a sign of gradual tonnage build up. 
  • Our assessment of the short-term shipping demand conditions is neutral. Demand for shipping capacity has decreased which has a lot to do with the strict compliance to the OPEC agreement. This has been an outright freight market negative development. The buying pressure on the seaborne crude oil market has also declined which is further eroding interest for seaborne trade.    
  • The macroeconomic environment has somehow improved. Forward demand from the automotive sector remains very weak but it rebounded from the lows registered in April-May. Same for the energy intensity in key oil importers. On the other hand, our trade weighted PMI index remains negative for crude oil / shipping demand.