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A Short 2021 Outlook

Dec. 30, 2020

Last week we examined a few of the key events and developments for the DPP and CPP tankers markets as well as global oil supply and demand for 2020.  This week we will attempt to highlight a few key trends that we see emerging in the oil and tankers markets, in anticipation for a year without pandemic-related restrictions and a return to “normal”.

Looking at the global oil supply and demand environment, we naturally expect both oil demand and supply to rebound from the negative numbers of 2020.  What is key though is that according to our latest numbers, demand ...

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A Year-End Review

Dec. 24, 2020

As the tumultuous 2020 comes to a close, we wanted to take this opportunity to write a short review of the events that left their mark on the markets, keeping the focus on oil supply and demand fundamentals and their influence on the as Crude/DPP and CPP tanker sectors.

In terms of oil supply & demand, the numbers have in-fact created some deep valleys this year, with a hopeful slingshot reversal in 2021.  The coronavirus pandemic kept people in their homes, and crude oil as well as its products such transportation fuels started filling up storage tanks instead of cars ...

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A Positive Export Picture for Brazil Crude

Dec. 18, 2020

Brazil, and generally the East Coast of South America has been a permanent segment of any discussion regarding crude oil supply and demand throughout the year.  The reason is the relatively steady output and export volumes that have been coming out of the country, even during the peak of lockdowns amid the coronavirus spread.  In this weekly highlight, we attempt to take a quick look at what the future of crude oil production and exports may look like for the region, focusing on Brazil, by far the largest producer in it.

Beginning with some fundamentals, Brazil’s economy has underperformed ...

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Refinery Closures and their Impact

Dec. 11, 2020

We have previously discussed refinery capacity additions outpacing underlying demand growth due to the resurgence of coronavirus infections, with unfavorable refining economics resulting from the subsequent lack of demand for products as well as the above average level of product inventories.  A somewhat “natural” outcome, we predicted, would be to start seeing more consolidation, conversion of existing crude distillation units to storage terminals or biofuel processing facilities, and in some cases, outright closures.

Indeed, for the past few weeks we continuously see news reports on refinery closures, especially in Asia where the processing capacity expansions of 2019 - 2020 that reached ...

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Thoughts on Iran and Venezuela in the Context of a Biden Administration

Dec. 4, 2020

Beginning with Venezuela, a Biden administration could potentially be considered more “lenient”, thus opening-up a path to diplomacy rather than the heavy-handed approach from the Trump administration.  But, even under ideal circumstances - Venezuelan production declines are not easily reversible after chronic under-investment, considering also that maintenance has been minimal at best over the last few years.  The main importers of Venezuelan heavy, sour crude have historically been the US, China and India.  These barrels would substitute other heavy sour barrels (mostly AG).  With that in mind, if those three buyers were to increase, the impact is more Aframax demand from ...

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