Seaport Global Securities knocked down estimates of third-quarter earnings for crude and products tanker companies as rates during the period hovered near two-year lows.

Shipping analyst Magnus Fyhr said the regular seasonal slowdown in tanker markets during August and September was exacerbated by reduced crude exports out of Nigeria, refinery outages and inventory drawdowns.

“Consequently, crude and product tanker spot rates have remained depressed for most of the quarter, with VLCC rates averaging $25,000 per day, 15% below our $30,000 per day estimate, while MR rates are averaging around $12,500 per day, 5% below our $13,000 per day,” Fyhr writes.

The drop in rates led Fyhr to reduce earnings estimates for “all companies in our crude and product tanker universe”. That universe includes Ardmore Shipping, DHT, Euronav, Gener8 Maritime, Hafnia Tankers, Scorpio Tankers, Tankers International, Teekay Tankers, Tsakos Energy Navigation, Frontline and Nordic American Tankers.

Along with the downbeat rate environment, Fyhr says concerns about the number of ships being delivered through 2016 and 2017 are also weighing down investor sentiment. He says the crude tanker market “is setting itself up for a recovery in 2018 as concerns around increasing fleet growth may be offset by limited new ordering activity and increasing scrapping of older vessels.”

Fyhr is a believer that a “seasonally stronger winter market is around the corner” as evidenced by VLCC rates increasing to over $30,000 per day. But he also trimmed forecasts for vessel earnings next year due to the supply-demand imbalance in the market.

Earnings forecasts are now assuming 2017 VLCC rates of $31,000 per day, compared to an earlier forecast of $35,000; suezmax rates of $25,000 per day, compared to an earlier forecast of $28,000; and aframax rates of $22,000 per day, down from $25,000 per day.

Product tanker rates also took a hit with Fyhr assuming LR2 rates of $21,000 per day, compared to an earlier forecast of $23,000 per day; LR1 rates of $18,000 per day, down from $20,000 per day; and MR rates of $17,000 per day, down from $18,500 per day.