Commercial analysis




Crude trade volume forecast to decline, but tonne miles to increase

The Paris-based International Energy Agency’s (IEA) medium term report projects oil demand to increase by 6.6 mbd over the period 2014-2020, which translates to a yearly average of -0.3% in the OECD area and +2.4% in the non-OECD area. Some 4.4 mbd (62%) of the increase in oil demand over the period is forecast to be in Asia, 1.4 mbd (20%) in the Middle East, 0.9 mbd (13%) in Africa and 0.6 mbd...... Login to view this article


Product tanker market

The products trade for tankers larger than 60,000 dwt has increased strongly over the last 10 years but seems to have stagnated and is now seeing a decline. Distances have increased in the products trades – average distance was 2,783 miles in 1994, 2,804 miles in 2004 and 3,604 in 2014, i.e. an increase of 28% since 2004. Products exports: The Middle East Gulf is by far the biggest products...... Login to view this article


Tonne miles down

A precondition for forming an opinion about the tanker market ahead is to try and understand what happened in the market in 2014. Average freight rates improved strongly last year, in particular at the end of the year. Tonne miles is probably the best measure for tanker demand and Lloyd’s List Intelligence has kindly provided us with figures for 2014. Improved freight rates in 2014 indicated a...... Login to view this article


Factors behind recent spike in VLCC rates

The spike in freight rates that started in October was stronger than anyone expected. This increased activity in the tanker market was to a great extent sparked by the plunge in the oil price. Brent Blend fell below $100 per barrel on 8 September last year and fell below $50 per barrel on 12 January. VLCC freight rates had increased from below operating costs last  June but we have since end...... Login to view this article


IEA revises down non-OPEC oil supply for 2015

The US-based Energy Information Administration (EIA) says in its oil market report (published 16 Jan) that steep drops in crude prices are only providing a limited boost to demand, as the price decline is itself at least partly demand-driven. The US is a notable exception. Recent data suggest that OECD demand has been falling by around 1% y-o-y through 2H14, as sharp declines in both power-sect...... Login to view this article


Breakdown of the world’s largest charterers

This week, INTERTANKO’s Senior Manager – Research and Projects, Erik Ranheim, takes a look at those chartering your ships. VLCC chartering dominated by Chinese charterers According to Poten & Partners, the Chinese charterers’ dominance in the VLCC spot market increased only marginally in 2014 compared to 2013/12. UNIPEC, PetroChina, CPC and Sinochem increased the number of spot contracts from 5...... Login to view this article


Rates on the up, but what exactly is driving the market?

It is not the basic fundamentals that are currently driving the market, rather it is speculation and a tendency to panic. The plunge in oil price and the strengthening of the dollar are setting a new and unfamiliar scene that is construed differently by the players in the market. Some use the opportunity to sell, others buy, while some speculate on the short-term effects and others take a...... Login to view this article


IEA downgrades oil demand outlook for 2015

The Paris-based International Energy Agency (IEA) has downgraded oil demand in its Monthly oil market report dated 12 Dec. We present the major points below. In the Monthly Oil Market report issued today (12 Dec) IEA says that the outlook for global oil demand growth for 2015 has been cut by 0.230 mbd to 0.9 mbd on lower expectations for the FSU and other oil-exporting countries. A strong dolla...... Login to view this article


Expect volatility as oil prices fall and tanker rates strengthen

The oil price continues to fall and tanker rates continue to strengthen – there is a dramatic development in the oil market and great uncertainty about the consequences.  No doubt it has had a tremendous effect on tanker rates, which are at their highest since end January 2010, when there was a short high peak in VLCC rates. The plunge in oil prices may both stimulate the economy and the oil...... Login to view this article


High rates, low activity for VLCCs

Despite a recent reduction, tanker rates had remained strong through November. This is in contrast to the low chartering activity noted by McQuilling Services, who reported only 79 fixtures on their selected VLCC routes, compared to 158 in October and 121 as an average for the year. Looking in more detail. McQuilling reports a 29% reduction in the AG to USG-Caribs fixtures but an 8-9% increase ...... Login to view this article


Surplus oil is of benefit to tanker owners

The tanker market is booming, the oil market is flowing over with surplus oil and the oil price is plunging on the day of a crucial OPEC meeting. No doubt the tanker market is benefiting from the surplus oil in the market, but in the longer run it is important where the oil is going – this information, though, is not yet publically available. The US has the most up to date information and we se...... Login to view this article


The speed, or otherwise, of the VLCC fleet

At a seminar attended by INTERTANKO in Oslo this week, Dr Ove Daae Lampe from Christian Michelsen Research AS presented his analysis of VLCC activity with data for the last three months using Automatic Identification System (AIS) data to map fleet activity. The above graph shows VLCC speed at one knot intervals. Some 26% of the fleet was not moving at this time, however, representing some 330,0...... Login to view this article


Oversupply of oil of benefit to tankers

Tanker owners are making money again as oil prices are the lowest in four years. The demand for oil is on the increase, but the supply of oil is seeing an even greater increase, and not just from the US and Canada. The Middle East, and especially Saudi Arabia, which traditionally has taken it upon itself to be the swing producer, is producing at full capacity and Saudi Arabia does not appear to...... Login to view this article


Spotlight on Russia

The market is charging on at record pace, and while we try to find out what is really going on we must take a look at the longer term oil market. The fall in oil prices, a boycotting of Russia, the slowdown in China, and a boost in US oil production are only a few of the issues the oil and tanker markets are facing. For now, we will look closer at the biggest oil producer in the world, Russia....... Login to view this article


How many VLCCs do we need?

The volatility in the market and the latest surge in freight rates, indicate that there is a limited surplus of tankers. It is however difficult to quantify this surplus. Nevertheless, we have carried out a trial for VLCCs. We have made a number of assumptions , but you can enter your own figures in the linked spreadsheet to calculate the result . For example a half knot increase in speed to 13...... Login to view this article


Stockpiling on the cards as OPEC expects oil supply to outstrip demand

The Paris-based International Energy Agency (IEA) has revised downwards its forecast of global oil demand for 2014 and 2015 for the second month in a row. Oil demand for 2014 was forecast to be 92.68 mbd in August and is forecast at 92.4 in October, while oil demand for 2015 was expected to be 94.00 mbd in August and is forecast at 93.53 in October. IEA says that specific economic concerns...... Login to view this article


Presentation: Tanker shipping – key driving forces

This week, INTERTANKO's Senior Manager – Research and Projects, Erik Ranheim, presented to a gathering of the organisation's Members in Copenhagen at INTERTANKO's European Panel meeting.   His presentation, entitled Tanker shipping – key driving forces , covered various topics, including:   ·          The state of the industry ·          The main driving force ·          Oil supply and demand ·...... Login to view this article


Middle East/OPEC spot sailings

The OPEC monthly report includes figures for spot chartering and tanker sailings from the Middle East. From Clarkson fixture data we can derive that, since 2001, September has been the third slowest VLCC fixture month (125.6 fixtures on average after June (124.9) and December (116.6). We are now entering October which has been, on average, the busiest VLCC fixture month of the year – 21.8% abov...... Login to view this article


Tanker supply and demand

There were bullish expectations for the tanker market for this autumn. So far the development has been the opposite of what many different analysts predicted because we were in a contango** situation with regard to the oil price. This could be because of slippage in the delivering of newbuildings, because the market cycle had turned or maybe because the US is to start exporting oil.     The...... Login to view this article


Greece has fewer owners but a bigger fleet

This week, our friends at Lloyd’s List published an article we felt would be of general interest to Members. We thank Lloyd’s List for allowing us to distribute the article in its entirety to you. Begins GREEK-owned shipping capacity continues to expand but closer examination of the ownership of the fleet underlines a clear trend towards consolidation, according to a new study by Petrofin...... Login to view this article

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