When Scorpio Tankers president Robert Bugbee offers to bet you on this or that development happening in the product tanker market, it is a good idea not to take that bet.
It is probably why tanker counterparts including Lois Zabrocky of International Seaways and Anthony Gurnee of Ardmore Shipping would not bite last week when Bugbee made a suggestion that might have seemed a bit farfetched.
The tanker panel at Marine Money’s 24th annual ship finance forum in New York was a jolly conclusion to the conference, with all the owners in a good mood about the current rates environment.
“In the Atlantic Basin, MR rates are around $40,000 per day. Add any demand and there’s going to be a strong reaction in the market,” Gurnee told the audience.
Bugbee was just waiting to pounce.
“We will see confirmed product tanker MR fixtures by Monday, not just at $60,000 but at $80,000 — I’m willing to bet on that,” Bugbee announced.
Bugbee’s fellow panellists chuckled, with no one challenging him or moving to take the bet.
“I may know information already,” Bugbee added to more chuckles.
Well, the other shoe has dropped. Bugbee has approached TradeWinds over the weekend with confirmation of a fixture that proves his point, wins the bet and even goes a bit further.
The 47,400-dwt STI Millennia (built 2019) was fixed on the weekend for a US Gulf cargo at a time charter equivalent of better than $85,000 a day on an Atlantic Basin voyage, Scorpio has confirmed. The charterer was not identified.
“Nobody’s saying that’s where the market is,” Bugbee told TradeWinds. “But it does show what is possible in a market that is increasingly tight.”
Stocks down, rates up
All three public owners harped on that theme during the Marine Money session, also noting rates that are firming in November before winter has officially arrived.
If there was one sour note for the panellists, it was that their stock prices were moving in the opposite direction from rates.
“All our stocks went down today and why? Because the price of oil went down? And all our rates went up. It’s crazy,” Bugbee said.
“We’re probably not going to have $120 [per barrel of] oil that will crash our markets. With oil prices down, with interest rates starting to move down, we may have a super-market like in the 1980s or 2000s. We could have a five-year market, and we’re barely 1.5 years into this one.”
