Commercial analysis

Published

Article

03.07.2015

The strong tanker market continues, but fleet increase may catch up

DNB is making positive noises both in the crude and LPG tanker sectors. It expects 2016–2017 crude tanker tonne-mile demand to grow by 4%, up from the -2% estimated for 2015, with volume growth of 2%, up from the 1% estimated for 2015. DNB’s views are underpinned by changing trading patterns, with Asian tonne-mile absorbing the US shortfall, OPEC releasing its spare capacity, growth in and...... Login to view this article

19.06.2015

BP Review – LNG trends

LNG production has experienced tremendous growth, but most producing areas have started to level off. Last year it was mainly the US (+5.8%), Saudi Arabia, +8.2% , Canada (+3.8%) and Iran (+5.2%) that had significant growth, although Russia declined by 4.3%.  The US represented 80% of the growth in natural gas in 2014. Russian gas production is some 170 bn cum above consumption and some 120 bn...... Login to view this article

19.06.2015

BP Review – oil product trends

The BP Review is one of the longest running statistical periodicals on oil and energy that is publically available and provides some unique trade figures. Oil product trade volumes only increased marginally in 2014 by 1.6% and crude oil declined by 0.1%. The big increases in products exports in 2014 were from the US and the Middle East. increasing from the US by 24% in 2013 and by 16% in 2014,...... Login to view this article

12.06.2015

US oil production levelling out

According to the US-based Energy Information Administration (EIA), total US crude oil production averaged an estimated 9.6 million barrels per day (mbd) in May, but it is expected to generally decline from June 2015 through early 2016 before growth resumes. Projected US crude oil production averages 9.4 mbd in 2015 and 9.3 mbd in 2016. We are now starting to see the effects of the decline in...... Login to view this article

12.06.2015

The gas tanker industry today

The gas tanker sector is a rapidly expanding industry. The LNG fleet has increased five times since 1998, the LPG fleet by 1.5 times. Data from maritime analysis firm VesselsValue.com showed that 13 LNG tankers have been scrapped since 2010, built from 1969 to 1978, the latter two being Shell tankers. Another 42, according to Norwegian investment bank Arctic Securities, which are 30 years or...... Login to view this article

05.06.2015

Long haul trades drive the VLCC market

Average monthly long haul trades for Americas/East have increased by 12.5% the first of 2015 compared average monthly figures 2014 and has more than doubled since 2010. West Africa Eastwards so far this year is at the same level as last year, but has increased more than 2.5 times the level in 2010 according to figures from US shipbroker McQuilling Services.  Overall fixture activity is below la...... Login to view this article

29.05.2015

Cheap oil fails to spark consumption

Financial Times report that cheap oil fails to spark consumer spending boom.   When the price of Brent crude more than halved in the second half of last year, many predicted 2015 would be a boom time for consumers     But with shoppers, particularly in the US, acting more frugally than anticipated, the benefits of the oil windfall — totalling more than $200bn for the US, eurozone, UK and Japan,...... Login to view this article

15.05.2015

Accelerating increase in oil demand – IEA

In this week’s oil market report, IEA reports that despite slowing US light tight oil (LTO) output, global oil supply growth remained at a steep 3.2 mbd year-on-year in April. At 95.7 mbd, total oil supplies were flat from March as higher OPEC output offset a drop in non-OPEC. Non-OPEC supply growth for 2015 is projected at 0.830 mbd Russian oil companies seem to be coping exceptionally well wi...... Login to view this article

08.05.2015

Atlantic/China tonne-miles help the market

Even if the VLCC rates have softened somewhat in recent weeks, the tanker market is still generally relatively strong.  Spot market activity does not appear to be that high and for the first four months of this year spot figures for selected VLCC trades are slightly declining, according to US broker McQuilling (see graph below). The Clarkson VLCC fixtures also show a decline of 2.4% for the...... Login to view this article

01.05.2015

The oil price put in perspective

While the oil price has now rebounded somewhat it is only now that we start to see the widespread consequences of the plunge in prices starting at the end of 2014. Although the effects of a drop in the oil price happen gradually, iit will take many months before the full effect of a sustained low price will appear. The effects will be widespread and mainly positive for the consumers and negativ...... Login to view this article

24.04.2015

Russian oil production hit the latest in a line of post-Soviet highs in March

Oil production in Russia was forecast to decline in 2015 by 0.030 mbd to an average of 10.54 mbd. However, despite lower oil prices and limited access to financing because of sanctions, Russian companies continue to increase crude oil production, which reached another post-Soviet record of 10.71 mbd in March, a hike of 1.34% on the year, although NGLs and condensates were supporting output in...... Login to view this article

17.04.2015

OPEC Oil Production in March peaking – IEA

According to the Paris-based International Energy Agency’s (IEA) April Oil Market Report the forecast of global oil demand for 2015 has been raised by 90 kb/d to 93.6 mbd, a gain of 1.1 mbd for the year. The notable acceleration on 2014’s 0.7 mbd growth follows cold temperatures in 1Q15 and a steadily improving global economic backdrop. Global supply rose by an estimated 1 mbd month-on-month in...... Login to view this article

10.04.2015

Saudi oil production at record level

Stocks in the US have continued to build steadily by some 1.1 mbd since the turn of the year and US crude oil imports increased strongly to 8.2 mbd in the 14th week of the year. This, according to the US-based Energy Information Administration (EIA) report, is despite a decline in US crude oil production of 1.5%. It will be exciting to see whether this is a temporary situation or the beginning ...... Login to view this article

02.04.2015

Stock building continues

The US has kept importing crude oil at the same level as in 2013, but commercial oil stocks have reached an all-time high. The US commercial crude stocks as of 20 March was 82 m barrels higher than at 2 January 2015, i.e. the stocks have been built up by on average 1.1 mbd every day, or in other words some 40 VLCC loads. The Paris-based International Energy Agency (IEA) reported that the total...... Login to view this article

27.03.2015

Structural changes in the oil market

OPEC production levels have traditionally been one of the best tanker market indicators. The tanker market became more complex when China started to take more oil from far away sources in Latin America and West Africa. And, after lending more than US$56bn to Venezuela, then China also became strongly connected to this oil producer, in particular after the fall in the oil price, when it will tak...... Login to view this article

20.03.2015

Actual and forecasted fleet growth

This year fleet growth will be low, although new tankers will be delivered. Sales for decommissioning is also low, with only some 0.6 m dwt so far this year. This includes one VLCC, two suezmaxes and one old small aframax. The graph below assumes an acceleration in sales for decommissioning to 8.7 m dwt, compared to 7.7 m dwt in 2014. The number of sales for decommissioning is assumed to increa...... Login to view this article

13.03.2015

Oil price realities impact the tanker market

The oil and tanker market entered into a new area with the halving of the oil price – a new condition in the market that so far poses more questions than answers. The period with above $80 per barrel in oil price lasted since September 2007, except with a sharp drop in 2008, only to recover above $80 again September 2010.       The average nominal Arabian Light oil price since 1970 has been som...... Login to view this article

06.03.2015

Tanker freight spot and period rates

So what pays off best? Period contracts or working in the spot market? We have recorded period contracts over several years and the below graph shows a simple year average of the period rates for periods of six months and longer in different segments. The spot rates are taken from the Baltic International Tanker Routes (BITR) rates. For the whole period 2000-2015 period rates have been on avera...... Login to view this article

27.02.2015

Tanker market driven by stockbuilding

A great deal of the oil transported over the past two to three months has gone to storage. Reuters reported China's crude oil stock build to be 0.194 mbd in November last year going up to 0.915 mbd in December. In 2014, China's total crude oil stockbuild was 111 million barrels, or an average 0.303 mbd, rising more than 31% year on year. China's crude imports in 2014 were up a sizeable 9.5% yea...... Login to view this article

20.02.2015

Refinery expansion and marine fuels

Refinery capacity expansion up to 2018 is projected to be larger than expected increase in oil demand (see graph below for details). Both the Middle East and China may increase their product exports over this period because their refinery capacity will increase more than domestic demand for petroleum products. Four of the 14 Middle East projects refinery projects that today import products are ...... Login to view this article

Related Articles

CONTACTS

Bill Box
Senior Manager, Commercial
E: bill.box@intertanko.com
P: +44 20 7977 7023