As with the dirty product segment, our projections at the beginning of the year for tanker demand in refined products seem to belong to a distant past. Globally, the COVID-19 reality has taken its toll on product demand, especially for gasoline and jet fuels amid the lockdowns and lack of travelling. Even as the world begins to re-emerge from quarantine, it has become clear that we will not see an immediate recovery. What this means for CPP tankers is an overall slump in ton-mile demand for the year, but perhaps less than the crude side due to increasing mileages as ...
Highlighting Expectations for VLCC Demand
May 22, 2020
The extraordinary times we are finding ourselves in have led analysts to revising projections and conclusions that were produced months, sometimes even only weeks prior. Similarly, projections on tanker demand for DPP cargos do not follow any kind of “normal” based on previous years and a world without a pandemic. Despite that, a few fundamental things remain the same. Two-thirds of tanker demand is still generated by VLCC tankers and remain the focus of our analysis along with crude balances, which drive that demand.
Overall, our analysis of tanker demand projects a drop of 4.8% in 2020 compared to ...
Pressure on Refineries
May 15, 2020
In the recent inventory report from the Energy Information Administration (EIA), we saw for the first time in many weeks, the total commercial crude inventories (excluding SPR) decrease by 0.7 million bbl. According to the same report, total motor gasoline inventories also decreased by 3.5 million bbl. These two numbers alone show how some partial reopening of some US and European economies has led to an immediate increase in implied demand, albeit very slightly given that no country in the Western world is expected to immediately rebound to pre-coronavirus levels.
The positive sentiment created by the US inventory ...
A Slowdown that Makes Sense
May 8, 2020
The tanker freight rates in the past couple of weeks have exhibited a peculiar behavior by reaching intense highs followed by a period of slumping until essentially today where we are starting to see the situation stabilizing and, in some cases, reversing. This week, we will take a quick look at the market lull, the reasons behind it and what may be developing in the near future.
The combination of increased production and demand destruction for March and April was mainly behind the extraordinary drop in crude oil prices. The market went on to develop a steep contango structure that ...
A Scenario for Global Crude Balances
May 1, 2020
As of today, May 1, the agreed upon OPEC cuts are officially coming into effect. So far this week we have seen the oil markets go from abysmal bottoms to relative support given not only the production cuts but also somewhat positive news regarding progress with COVID-19 drugs and potential re-openings of some parts of the US and world economies this month. With that in mind, we take a look on how crude oil balances may evolve in the foreseeable future.
By using the latest available Data in April, we attempted to map out the changes in global crude inventories ...