Top 16 Events that Impacted Tanker Shipping in 2016

Dec. 30, 2016

As we head into the New Year, we’ve rounded up the top 16 events that impacted tanker shipping in 2016. 

1. US Crude Oil Exports
It has been about a year since the ban on US crude oil exports was lifted, a move that has been helping to reshape the world’s energy map.  This crude, which was previously being exported mostly to Canada, is now flowing around the globe to places like Northern Europe, the Far East, Caribbean and East Coast South America.   The chart below shows the increase in non-Canada destinations beginning in 2016, when compared to ...

TD9 Soars to New Highs

Dec. 21, 2016

Rates on TD9 (Carib/US Gulf) traded up from WS 130 to an initial plateau of WS 170 throughout yesterday as the position list for December dates in the Caribbean remains tight.  With around 50% of the tonnage removed from the Caribbean, rates were expected to find some support this week; however, today’s surge to WS 200 was exacerbated by weather delays in the region.  High winds in the US Gulf have interrupted lightering programs causing tanker delays and pushing charterers to seek out replacement vessels.  Owners positioned in the Caribbean took advantage of the delays, pushing rates to ...

The Empresa de Docagens Pedra do Ingá (EDPI) Ship Repair Yard Project in Brazil Receives Priority from the Fundo de Marinha Mercante – FMM (Merchant Marine Fund)

Dec. 9, 2016

(New York – 9 December 2016) – At the 33rd ordinary meeting on Thursday, 1 December, the Board of Directors of the Merchant Marine Fund (CDFMM), at the Ministry of Transport, Ports and Civil Aviation in Brasilia (DF), approved to finance basis 2.15 billion reais for the construction of a new ship repair facility in Brazil as part of a 9.15 billion reais program for new and existing projects.

The approval was issued for the Empresa de Docagens Pedra do Ingá (EDPI) ship repair yard facility of the Brasil Basin Drydock Company (BBDC).  The yard will be located in the ...

Distance Dictates Demand

Nov. 21, 2016

Global refinery capacity is projected to reach 96.6 million b/d by the end of 2016, with 64% of these capacity additions stemming from East of the Suez markets.  The Far East, Indian Sub-Continent and Southeast Asia regions lack the amount of crude oil production needed to meet refinery demand, leading them to source marine transported barrels from foreign nations.  The re-arrangement of this sourcing dictates tanker trade routes and impacts ton-mile demand in the East of the Suez markets. 

In McQuilling Services latest complimentary industry note, the group analyzes bilateral country trade flow data through July in order ...

Rates in the Med Rise

Nov. 17, 2016

A firming trend has been observed in the Mediterranean market in November as Aframax rates on the cross-Med route have climbed from an average of WS 70.5 in October to average WS 98 month-to-date.  The strengthening is due in part to boosts in both Kazakhstan and Libya crude production, which has effectively increased available cargoes in the Central and West Mediterranean.  Although Kazakhstan’s output dropped by 300,000 b/d in August due to a period of heavy maintenance, the restart of the massive Kashagan field in the Caspian Sea increased the nation’s production to 1.25 ...

Congratulations McQuilling Dubai

Oct. 25, 2016

We are pleased to announce McQuilling Dubai is the proud recipient of the "Marine Broker of the Year" award, which was presented to the group at the 2016 Maritime Standard Awards in Dubai on October 24. 

VLCC Freight Rates Make a Move

Oct. 14, 2016

VLCC owners are benefiting from the recent uptick in spot rates as export activity out of the Arabian Gulf and West Africa has increased.  Back-to-back weeks of strong demand have opened fixing opportunities and helped absorb excess tonnage, creating positive sentiment as the winter season ramps up.
 

Increased Arabian Gulf volumes led to a surge in fixing during the last week of September and first week of October with 88 reported fixtures, almost double the activity seen in the two weeks prior.  Lower activity to the East was initially expected by some market players, given the Chinese Golden Week beginning ...

Weekly Tanker Summary

Oct. 7, 2016

The following is an overview of tanker spot market activity for the week ending October 7, 2016

VLCC

On the back of steady volume out of the AG, rates on the AG/East trade rose from the WS 40s to the mid-high WS 50s. AG/West was quiet and one vessel that was fixed at WS 27, ultimately failed.  At current bunker levels, the TCE for a voyage AG/East is about US $43,000/day basis WS 57.5, while the TCE for a cargo AG/West followed by Caribbean/Singapore traded around US $35,000/day. 

In the ...

Will US Crude Exports Impact Tanker Demand?

Sept. 27, 2016

The Brent to West Texas Intermediate (WTI) spread has fluctuated over the years, with Brent posting a premium to WTI in most cases.  For the tanker market, the value of this variance has gained further importance since the removal of the US crude export ban because it provides cargo holders with new commercial opportunities, dictating tanker trading patterns and global tanker demand.    

In Industry Note No. 13 - The US Makes an Entrance in the East - we will discuss our views of the Brent/WTI spread, its impact on US exports and how tanker demand may be affected. 

Tanker Demand Update

Aug. 25, 2016

Demand for tankers is segmented along vessel classes by size and cargo type; however, there can be significant cross-over demand between segments.  Tanker demand is a derived demand, driven by regional economic activity and increased energy consumption.  The primary driver of tanker demand is the transportation of crude oil and residuals at 83% of the total call on tankers; however, we have observed a growing volume of refined products transported.

Crude and residuals transport totaled just over 9.5 trillion ton-miles in 2015, the second highest recorded ton-mile demand, trailing only 2012.  Total demand growth is expected to decelerate in ...

Global Oil Supply and Demand at a Glance

Aug. 17, 2016

Global oil demand is expected to rise 1.4 million b/d to 95 million b/d in 2016, driven in part by increasing demand for LPG, naphtha, jet fuel/kerosene and gasoline.  Global refinery capacity is due to reach 95.2 million b/d by the end of 2016, with the Far East accounting for 22% of the market share.  India is poised to bring over 500,000 b/d of additional refining capacity to the market before the end of this year.  In the West, Europe is forecast to shutdown 235,000 b/d of capacity in 2017 ...

Weekly Tanker Summary

Aug. 12, 2016

The following is an overview of tanker spot market activity for the week ending August 12, 2016

VLCC

Activity increased in the Arabian Gulf week-on-week and rates rebounded slightly for both AG/East and AG/West as owners took advantage of charterers’ needs to take modern tonnage.  An options cargo on the AG/East route fixed at WS 40, while cargoes, without options, stuck to older vessels and paid around WS 34-35.  The TCE for an AG/US Gulf cargo followed by a Caribbean/Singapore cargo paid around $29,000/day while an AG/Japan cargo traded around US $21 ...

McQuilling Services Releases Mid-Year Tanker Market Outlook Update

Aug. 10, 2016

McQuilling Services recently released the 2016 Mid-Year Tanker Market Outlook Update, which provides a review of the January Tanker Market Outlook as well as an updated forecast for the balance of 2016 through 2020 based on market conditions in the first half of the year.  Findings from the report can be found below. 

KEY FINDINGS

Global oil demand in 2016 is expected to rise by 1.38 million b/d to over 95 million b/d, representing a 1.46% increase year-on-year, before decelerating in the balance of our five year outlook.  Looking ahead, we expect global supply of crude ...

Weekly Tanker Summary

July 15, 2016

The following is an overview of tanker spot market activity for the week ending July 15, 2016

VLCC

Volume fell off significantly in the Arabian Gulf, but tates for AG/East remained steady in the low WS 40s, while AG/USG edged up slightly during the week to WS 27 via the Cape. The decrease in fixture activity extended into the Western Hemisphere, with only around 10 deals reported. Rates for West Africa to East Coast India paid US $3.65 million for a replacement fixture, while West Africa/China moved up slightly from WS 47.5 to WS 48 ...

The Empresa de Docagens Pedra do Ingá (EDPI) Ship Repair Yard Project in Brazil Receives Preliminary Environmental License

July 15, 2016

(New York – 15 July, 2016) – The preliminary environmental license was issued to the Brasil Basin Drydock Company (BBDC) yesterday, accomplishing a major milestone in the implementation of the Empresa de Docagens Pedra do Ingá (EDPI) ship repair yard facility, to be located in the municipality of Lucena, in the northeastern Brazilian state of Paraíba.

In October 2015, the BBDC applied for the license from SUDEMA, the state environmental agency with authority in the region, who then issued the Terms of Reference for which the environmental impact analysis report was to be produced.  This report, called the EIA/RIMA for ...

Weekly Tanker Summary

July 8, 2016

The following is an overview of tanker spot market activity for the week ending July 8, 2016

VLCC

Activity dipped in the AG as 30 ships were reported fixed or on subjects this past week.  Rates for AG/East fell as low was WS 40 before moving slightly higher.  An AG/USG voyage was concluded at just under WS 25 via the Suez Canal, while AG/West Coast India looked to pay in the low WS 60s.

 Activity fell again in the Atlantic Basin as 13 vessels were reported fixed or on subjects, including six in West Africa, five in ...

Weekly Tanker Summary

July 1, 2016

The following is an overview of tanker spot market activity for the week ending July 1, 2016

VLCC

Activity remained steady in the AG and rates continued their upward trend in the early part of the week, but once the supply situation was reevaluated, rates started to pull back slightly, especially for disadvantaged tonnage.  At the time of writing, AG/East was steady in the mid-WS 40s and AG/West in the high WS 20s.  (To read more about the increased use of disadvantaged VLCC tonnage – download Industry Note No. 8 – Plenty of Suitors for These Older Ladies)

Activity declined ...

New Industry Note Available

June 29, 2016

McQuilling Services latest industry note, Naphtha Exiting the European Union, was co-authored by JBC Energy, a leading research institute that offers independent and unbiased expertise for the global energy sector from Vienna, Austria. This note aims to provide the tanker industry with unique insight into the outlook for West to East naphtha tanker flows in the second half of 2016 and the impact on corresponding clean tanker rates.

Weekly Tanker Summary

June 24, 2016

The following is an overview of tanker spot market activity for the week ending June 24, 2016. 

VLCC

There was an uptick in AG activity week-on-week and a demand spike mid-week helped to absorb a lot of excess tonnage from June and the first 10 days of July.  AG/East rates bottomed at WS 36-38 before bouncing back to the WS 45 level by week’s end.  Rates for AG/West traded steady in the mid-WS 20s for the majority of the week and then moved up into the high WS 20s before close. 

There was also an increase in ...

McQuilling Services Presents at Intertanko

June 23, 2016

On May 25, 2016, the Director of McQuilling Services Singapore, Ms. Katharine Cheong-Koh, gave a presentation on the Global Chemical Tanker Outlook at the 2016 Intertanko Annual General Meeting in Capella Sentosa in Singapore.  The presentation focused on evolving chemical tanker trading lanes, the regional competitive landscape and identified investment opportunities for this sector over the next few years. 

For a selection of key takeaways from the presentation, please contact katharine.c.koh@mcquilling.com.

The Benefits of Registering on McQuilling.com

June 21, 2016

Whether you are an owner, charterer, operator or investment banker, there are many benefits to becoming a registered user on McQuilling.com.  Besides being completely complimentary, registration gives users access to premium content on the site, which is outlined below: 

Industry Notes
Industry-leading analysis from research and consulting firm, McQuilling Services, on trending market topics.  These notes are published on a bi-monthly basis and provide readers with in-depth insight on factors influencing the global shipping markets.

Tanker Podcasts
Stay on top of what’s driving the tanker markets with a weekly 5-minute overview of spot and period market activity ...

Weekly Tanker Summary

June 17, 2016

The following is an overview of tanker spot market activity for the week ending June 17, 2016

VLCC

Volume in the AG fell week-on-week and rates for AG/East declined to the high WS 30s, down over 20 WS points from the close of the previous week, while AG/West dipped into the mid-WS 20s.   On the other hand, activity picked up in the Atlantic Basin as 13-14 fixtures were reported.  Despite the uptick, WAFR/China rates fell to the low WS 50s, while an East Med/UKC cargo was concluded at WS 50.  In the Western Hemisphere it was ...

Monthly Tanker Update: May

June 16, 2016

Crude oil production has come under pressure in several countries, specifically West Africa as a surge in militant attacks has reduced Nigeria’s output by about one million barrels per day.  The lost production in Nigeria has helped to support crude prices which have climbed to above $50 per barrel for the first time since November 2015. Prices have also found further support from outages in Canada stemming from wildfires in the oil sands region as well as Venezuela and Libya.

The United States has also seen a reduction in domestic crude oil production as it fell to an average ...

Venezuela Port Delays

June 15, 2016

Venezuela’s economy has been on a downward spiral since the collapse of global crude oil prices and the situation appears to be getting worse for the oil-dependent country as production dropped to 2.37 million b/d in May, down 10.7% from the full year average for 2015 (according to data published by OPEC). 

Because of its continued economic hardship, cash-strapped Venezuela has been challenged to pay oil suppliers, delaying tankers from loading and unloading cargoes on time.  Our analysis of AIS position data has showed a rising number of DPP tankers (27,000 dwt and above) either ...

Weekly Tanker Summary

June 10, 2016

The following is an overview of tanker spot market activity for the week ending June 10, 2016. 

VLCC

Activity remained steady week-on-week in the Arabian Gulf.  AG/East rates rose back into the high WS 60s, with some spikes into the low WS 70s. Rates to the West traded steady at an average of WS 35.  In the Atlantic Basin, WAFR/China rates remained steady in the mid-WS 60s. 

SUEZMAX

Volume fell again in West Africa and rates initially held last week’s closing levels as WS 82.5 was achieved early on, but this was short-lived as a cargo ...

The Tanker Orderbook

June 7, 2016

Nearly half of the year is behind us and one thing that continues to stand out is the lack of a tanker newbuilding orderbook. We have recorded just 38 orders placed through May.  The last time we saw activity this low was in 2011, when 40 newbuilding orders were recorded during this same period.    

Leading the year’s orders so far is the Suezmax class, with 10 in the books, followed by the MR2 class with nine orders.  Third in line is the Aframax class, accounting for 19% of the total 2016 orderbook.  Absent from the list so far ...

Weekly Tanker Summary

June 3, 2016

The following is an overview of tanker spot market activity for the week ending June 3, 2016. 

VLCC

Activity levels continued to climb in the Arabian Gulf and AG/East rates slowly rose back into the mid-to-high WS 60s, while AG/West paid in the mid-WS 30s.  We are now heading into the third decade of June with 90 vessels fixed so far for the month and we would expect to see another 30-35 ships fix before the June program comes to a close.  In the Atlantic Basin, WAFR/China increased slightly to the mid-WS 60s, up from the high ...

Global Oil Supply Outages and Their Impact on the Tanker Markets

May 19, 2016

In the past several months there have been a series of unexpected crude supply disruptions in multiple locations across the globe including Canada, Nigeria and Venezuela.  Widespread concerns about when production will resume in these places has pushed benchmark oil prices to their highest levels since October 2015.  Each of these outages has the potential to impact various segments of the tanker market. 

Canada

Massive wildfires in the oil sands hub of Fort McMurray, Alberta and slightly north of the region have forced several oil producers to halt operations at their facilities, cutting production by up to 1.2 million ...

The EDPI Ship Repair Yard Project Achieves Another Milestone

April 21, 2016

On Monday of this week, the completed environmental impact assessment for the Empresa de Docagens Pedra do Ingá (EDPI) ship repair yard project was submitted to the Paraíba state environmental agency, SUDEMA.  This report, the “Estudo de Impacto Ambiental/Relatório de Impacto Ambiental” (Study of Environmental Impacts/Report of Environmental Impacts, called the EIA/RIMA) was produced in accordance with the requirements to receive environmental licenses for the construction of the new ship repair yard.

The Commercial Director of McQuilling Services, LLC, New York and the Project Director of the Brasil Basin Drydock Company (BBDC) project, Dave Saginaw ...

Portuguese Version of EDPI Animation Video Now Available

April 18, 2016

The Empresa de Docagens Pedra do Ingá ship repair yard to be located in Lucena, Paraíba represents a major infrastructure project in Brazil that will create a world-class facility standing beside the top ship repair installations in the world today. From an ideal location proximate to major shipping lanes, the EDPI yard will deliver high quality, reliable repair and drydocking services to the global merchant fleet.

For more information, please visit www.EDPIshiprepair.com

Take a Virtual Tour of the Future EDPI Ship Repair Yard

March 31, 2016

The Empresa de Docagens Pedra do Ingá ship repair yard to be located in Lucena, Paraíba represents a major infrastructure project in Brazil that will create a world-class facility standing beside the top ship repair installations in the world today.  From an ideal location proximate to major shipping lanes, the EDPI yard will deliver high quality, reliable repair and drydocking services to the global merchant fleet.  For more information, please visit www.EDPIshiprepair.com

Invest in Aframaxes? Yes, Please!

March 21, 2016

Identifying emerging trends is the cornerstone of managing risks accordingly and maximizing returns on investment. For the tanker markets, our analysis indicates that Aframaxes may be on the verge of reversing the downward trend in demand experienced over the last four years ending in 2015. From a supply perspective, the aging profile of the Aframax fleet, coupled with a relatively modest orderbook, are likely to support a relative out performance of earnings over the medium term, making these tankers an attractive investment at current levels.

INTERESTED IN THIS TOPIC? DOWNLOAD THE FULL ANALYSIS HERE

Tanker Shipping and Trade Industry Leaders 2016

March 16, 2016

We are pleased to announce that for the second consecutive year,  McQuilling Partners’ President and CEO, John Schmidt, was featured in Tanker Shipping and Trade Industry Leaders 2016 Read the full article on page 32 

McQ Holdings grows team ahead of capital markets bid

Jan. 15, 2016

McQuilling Holdings (McQ Holdings) has expanded its team as the investment banking boutique backed by tanker broker McQuilling redoubles efforts to burst into the capital markets in shipping and beyond.

McQuilling India Announces its Empanelment with IndianOil

Jan. 13, 2016

We are pleased to announce that McQuilling Shipping Services India is now a broker on the panel of the Indian Oil Corporation, with BPCL and HPCL empanelment under process.

Our offices in India are headed by Capt. Raghu Kodakara, who has joined us after having worked for a large ship owner, chartering vessels of various sizes.  Our team, located in Mumbai and New Delhi, consists of crude, product and gas brokers. 

Our clients can expect the same professional and reliable services from our team in India that they have come to expect from all of the McQuilling offices worldwide.

Get ...