VLCC and Suezmax rates struggle amid weak sentiment despite reduced vessel supply. Aframax faces slow demand as VLCCs and Suezmax ships capture cargoes, pushing out natural dates for improvement, reports Fearnpulse.
VLCC
Sentiment Trumps fundamentals in the tanker segment, no pun intended. At least now we know who the US president is going to be for the next 4 years and general politics aside the president elect does have a “drill-baby-drill” stance on oil, which subject to tariffs, other trade implications and all things equal, could be good news for the tanker market. In the meantime, there’s been no reason for the owning community to celebrate in the week gone by, with rates going from bad to worse. However, the MEG position list has shrunk, and the ownership spread is lower than we’ve seen for weeks, which should dictate the opposite. But at the time of writing a negative sentiment is prevailing, and many owners have adopted a “get out of Dodge” strategy, accepting what’s on offer with little or no push-back. The darkest hour is just before dawn as the saying goes, and whilst we might see some more profit taking, we shouldn’t be too far off a bottom.
Suezmax
Globally, the last four working days have been quiet, at least on the surface, which has had a negative impact on rates. Thankfully, today has heralded a trickle of activity in various load-zones however the key point is that this enquiry is too spread out (geographically) to have much of an impact.
Last done Angola/UKCM is reported on subjects 130kt x WS 87.5 which in theory prices TD20 at WS 90. Given that the list is populated with an armada of FOC ships, this wasn’t the worst outcome for owners, although we see this benchmark route ultimately trading down to the WS 80’s.
In recent times the Atlantic Suezmax market has relied heavily on USG Aframaxes for a kick start, but there is no hint of this segment coming to the rescue prior to the weekend.
In the East, there is just one firm working cargo at the time of going to press with MEG/East max 130KT x WS 105-107.5, whilst BOT/UKCM COGH will do well to price higher that 140KT x WS 57.5-60.
Aframax
A lacklustre start to the week with little reported. VLCC and Suezmax have been taking cargoes away from the Aframax tonnage and natural dates now pushing out to the middle of the month. Other trading areas are not giving much support for ballasting away, but it isn’t stopping the prompt vessels heading out rather than take what looks like a fair bit of waiting time.
Some activity and a fair few fixtures done; the front end of the list has cleared with ships fixed and some taking the ballast to the USG but looking forward towards mid-month, there are some ships coming around in the region that will work the fixing window which continues to push far ahead. With possibly little supply left to cover in the 2nd decade it will take a busy 3rd decade to see any improvements here on the rates.
Did you Subscribe to our daily newsletter?
It’s Free Click here to Subscribe!
Source: Fearnpulse
