McQuilling Services expresses observations through the first quarter of 2018 regarding vessel demand and supply with focus on recent activity in the VLCC scrap market. Many of the demand trends observed in the second half of 2017 are continuing this year as explained in this episode. For the balance of the year, the group expects the majority of tanker fleets to continue expanding, while the recent growth in newbuild contracts may pose additional risk to oversupply down the road.
Supply Side Dynamics
Dec. 14, 2017
We have witnessed a considerable expansion of the tanker fleet this year with net growth through October 2017 of 79 DPP tankers and 48 CPP vessels. The fleet is expected to expand further through the remainder of the year; however, as we move into the 2018/2019 period we begin to see a slight shift in fundamentals as discussed in our latest episode of McQuilling TV.
McQuilling Services' Short-Term Outlook
Oct. 20, 2017
For the upcoming winter season, we expect VLCC rates to follow the traditional seasonal uptick we typically observe during this time of the year; however, the magnitude in which rates rise is likely to be lower than previous years. For the Suezmax sector, we expect demand support out of the Black Sea amid higher crude supply as well as on some short-haul voyages into Europe such as TD20.
Mid-Year Tanker Market Outlook Update
Sept. 7, 2017
VLCC demand along the AG>West trade is likely to remain subdued over the remainder of the year amid OPEC-led production cuts in the Middle East as well as higher crude supply in the US. Regarding Arabian Gulf volumes to the East, we expect ton-mile demand growth of about 1.6% this year, while Atlantic Basin volumes to the East will remained supported by higher US crude exports on the back of favorable WTI pricing.
McQuilling Services' July Short-Term Tanker Market Outlook
July 26, 2017
The International Monetary Fund recently downgraded US GDP growth estimates by 0.2%, which could potentially indicate slower than expected domestic demand for refined products. In our view, this would likely lead to higher clean product flows out of the Gulf to regional trading partners in the Caribbean.