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The Hurricane Pattern on CPP Freight rates

Aug. 28, 2020

The Hurricane Laura has roared throughout the US gulf region this past week, resulting significant delays or closures in major ports and ship channels, especially in Louisiana. A chemical leak has also been reported near Lake Charles on Thursday with shelter-in enforced around the area.  According to Platts, two Lake Charles refineries and five more in Texas were closed in advance of Laura’s landfall, over 2.3 million b/d of refining capacity.  The five Texas refineries should restart soon after the safety inspections.

Simultaneously, the CPP freight rates have jumped phenomenally in the East side of Atlantic Basin ...

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What to Expect for the DPP Tanker Demolitions

Aug. 21, 2020

We have done a lot of work utilizing historical data to find a way to determine when a ship has a good probability of exiting the trading fleet based on age and other characteristics.  For example, in our analyses in the past, we have shown that 67% of 24-year old VLCCs in a given year exit the trading fleet and so on. Another interesting piece of information that can help paint a picture of the supply side of the tanker market is combining age information with known drydocking schedules.  This becomes especially important this year as due to the global ...

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Mid-Year CPP Earnings Review

Aug. 14, 2020

Following on the mid-year review we did last week for the DPP sector, this week we are looking at how earnings evolved for the clean product tankers in a year that so far has proven to be extraordinary. 

The global demand crisis brought in by the coronavirus pandemic and subsequent lockdowns affected CPP tankers the same way it did with the DPP sector.  Almost overnight, product prices took a big hit and the markets switched into a steep contango structure.  The combination of cheap products and an opportunity to sell in the future for a potential profit led to a ...

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Mid-Year DPP Earnings Review

Aug. 8, 2020

As we are over the mid-year mark in a year when not many things have been “normal”, we decided to look back and examine the main events that have shaped earnings in the DPP tanker sectors to date.  The beginning of August signifies the end of the “chapters” of additional floating storage as well as the deepest OPEC cuts in history.

The two main events affecting the tanker market were the global coronavirus pandemic that led to a destruction of oil demand and the short-lived price war initiated by Saudi Arabia in early March. Despite the lack of demand, almost ...

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