Current Tanker RatesCurrent Tanker Rates
|Current Tanker Rates|
Teekay Marine Market – Tanker Update
Visit the Marine Markets video page for past updates on the tanker, LNG and offshore markets from Research Manager Christian Waldegrave.
Quarterly Tanker Update: Q4-2014
Crude tanker spot rates strengthened considerably during the fourth quarter of 2014, with rates averaging the highest for a fourth quarter since 2008. The increase in tanker rates was primarily due to a combination of winter weather delays and the impact of lower global oil prices, which is having a positive impact on tanker rates in a number of ways:
- Lower oil prices encourages the filling of both strategic and commercial reserves, particularly in China where the government continues to fill the second stage of its Strategic Petroleum Reserve;
- Higher refinery throughput as refiners take advantage of improved refining margins; and
- Reduced bunker prices, which are positive for tanker earnings by lowering voyage operating costs.
Crude tanker rates have remained strong in the first quarter of 2015 due to a combination of increased Russian oil exports, ongoing winter weather delays, and continued strong oil demand due to low oil prices. In addition, rates for large crude tankers have been supported by the emergence of floating storage, with more than 30 Very Large Crude Carriers (VLCCs) booked on time-charter contracts with storage options in January 2015. As these storage options are exercised, this will have a positive knock-on impact on the Suezmax sector, as the removal of VLCCs from the trading fleet increases demand for Suezmaxes on certain routes.
LR2 product tanker rates in the fourth quarter of 2014 averaged the highest for a fourth quarter since 2008. LR2 rates have been supported by record high levels of Asian naphtha imports from the West, coupled with an increase in long-haul product exports as new refineries in the Middle East ramp up production. The reduction in global oil prices has also been positive for the LR2 trade, as lower naphtha prices in relation to liquefied petroleum gas (LPG) has led some petrochemical plants to process more naphtha instead of LPG.
World Tanker Fleet
The global tanker fleet grew by 7.2 million deadweight tonnes (mdwt), or 1.4 percent, in 2014. The majority of the fleet growth during the year was in the product sectors, whereas the crude tanker fleet grew by just 2.2 mdwt, or 0.7 percent. The global Suezmax and uncoated Aframax fleets reduced in size by three vessels, or 0.6 percent, and 19 vessels, or 2.9 percent, respectively. Looking ahead, the global tanker fleet is forecast to grow by only 1.7 percent in 2015, with growth again weighted towards the product sectors and another year of negative fleet growth expected for the Suezmax and uncoated Aframax sectors.
In January 2015, the International Monetary Fund (IMF) lowered its outlook for 2015 global economic growth to 3.5 percent, from 3.7 percent previously. This marks a modest improvement from global economic growth of 3.3 percent in 2014. Global oil demand, based on an average of forecasts from the International Energy Agency, the Energy Information Administration, and OPEC, is forecast to grow by 1.0 million barrels day (mb/d) in 2015, which is 0.2 mb/d higher than demand growth in 2014.
The outlook for crude tanker fleet utilization and spot tanker rates is expected to remain positive in 2015 based on a shrinking mid-size crude tanker fleet and a continued increase in long-haul tanker demand as more crude oil moves from the Atlantic to Pacific basins. The impact of low prices and the development of floating storage in the first quarter of 2015 are also expected to support positive tanker demand in the first half of 2015.
Forward Looking Statements
This video and content contains forward-looking statements which reflect the Company’s current views with respect to certain future events and performance, including statements regarding: tanker market fundamentals, including the balance of supply and demand in the tanker market, and spot tanker charter rates. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in spot market tanker rates; changes in the production of or demand for oil; changes in trading patterns significantly affecting overall vessel tonnage requirements; greater or less than anticipated levels of tanker newbuilding orders or greater or less than expected level of tanker scrapping; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates and other factors discussed in Teekay Tankers’ filings from time to time with the United States Securities and Exchange Commission, including its Report on Form 20-F for the fiscal year ended December 31, 2014 and its Reports on Form 6-K for the quarterly periods ended June 30, 2014, September 30, 2014 and December 31, 2014. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.