Recent green shoots in the product tanker market are here to stay, Fearnleys Securities said on Friday.
The banking arm of the Norwegian shipbroking giant said LR2s were earning $30,000 per day and MRs trading in the Pacific $34,000 per day as the market shifts into the typically strong Northern Hemisphere winter.
“[The strong rates are] a feat we deem likely to maintain high levels throughout the winter as we are entering the ‘high’ season with low inventories and it could be a particularly strong market should we get a cold winter in Europe,” analyst Oystein Vaagen said.
Fearnleys noted LR2 rates spiked above $35,000 per day in early August before cooling off and shifting to a more steady climb upward.
Clarksons assessed the weighted average LR2 rate at $37,600 per day, up 9.4% over the last month.
It said a non-eco, scrubber-less LR2 sailing from the Middle East Gulf to Japan would earn $31,900 per day, a 21% jump since mid-August.
The UK shipbroker said the MR weighted average was $27,000 per day, a 17% dip over the last month.
But the Singapore to Australia route jumped 21% to $30,800 per day for a non-eco, scrubber-less ship, while the Baltic Exchange’s Pacific MR basket climbed from $15,516 per day on 6 July to $33,750 per day on Friday.
In his note, Vaagen said the product tanker owners in his coverage universe — Hafnia, Scorpio Tankers, Torm and Ardmore Shipping —are “highly attractive” investments given their trading below net asset value.
That comes even as the International Energy Agency’s Wednesday report revised down fourth-quarter demand estimates by 600,000 barrels per day.
Vaagen said the revision suggests a 1.2m barrel per day shortage in the second half of 2023.
