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Scrubber Investments, Another Virus Victim

April 24, 2020

The conversation on scrubbers in the tanker sector has been somewhat suspended lately and for good reasons.  First, global quarantine measures have left shipyards either closed or with little personnel, resulting in backlogs and delays.  Second, tanker freight rates are soaring, making any gains from bunker fuel price differentials assume a secondary role in the voyage economics.  Third, with the collapse of crude oil prices, bunker prices have followed suit and we have been observing the price difference between VLSFO and HSFO shrink daily.  This week, we look at this price spread and how it affects an investment in a ...

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The New LR2 Trades from The Far East

April 17, 2020

In previous weeks we looked at opportunities in floating storage for the clean sector and specifically LR2 tankers.  This week we are taking a quick look into new potential trades and ton-mile demand for the same sector -specifically for gasoil cargos. 

This arises from the contango market and the natural arbitrage that seems to be emerging between the Far East and Europe.  Using the latest available data, we see how refineries in the Far East have already started to bounce back to production along with easing of restrictions due to the coronavirus spread.  Refinery utilization rates are increasing in April ...

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More Surprises on Floating Storage

April 3, 2020

In the past two weeks we examined the economics of floating storage, looking at VLCCs and crude storage as well as LR2 tankers and gasoline storage.  This week we are going to take a final look at what led to this surge in floating storage as well as the signs of a possible reversal.  We are referring of course to yesterday’s tweet by US President Donald Trump, who claimed that an agreement for production cuts between Saudi Arabia and Russia may be close.  This would not be of much importance if it wasn’t followed by a truly unprecedented ...

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