Teekay Tankers trumpeted strong aframax numbers and pointed to an improving market this year as it rang up a smaller than expected second quarter loss.
New York-listed Teekay said rates were facing short-term headwinds but were stronger on a year-on-year basis backed by tighter market fundamentals.
And its expectations for better times ahead are supported by new emissions laws and the smallest tanker newbuilding orderbook this century.
Kevin Mackay, chief executive of Teekay Tankers, said heavier than normal refinery maintenance in preparation of IMO 2020 was expected to continue in the early part of the third quarter.
However, he noted rising US production had boosted both the lightering business and rates from the company's aframax fleet, which sat above $20,000 per day in the second quarter, beating peers and benchmarks.
“We expect this strength to continue into the third quarter as additional pipeline capacity comes online, allowing U.S. crude oil exports to further increase,” he said.
“We continue to believe that tanker market fundamentals support a market recovery in the latter part of the year and into 2020 due to projected underlying oil demand growth, an expected increase in US crude oil exports, significantly higher refinery throughput ahead of IMO 2020 regulations, and lower tanker fleet growth.”
Teekay said the new sulphur emissions laws will bring additional volatility, new trade patterns and arbitrage movements, floating storage demand, and a potential increase in port congestion to the tanker market picture.
At the same time the arrival of new US Gulf pipeline infrastructure should assist the aframax and suezmax sectors at a time fleet growth is set to drop.
“The tanker orderbook currently totals 53 mdwt, or 8.7% of the existing fleet size, which is the lowest tanker fleet-to-orderbook ratio since early-1997,” Teekay Tankers said.
The shipowner carded an adjusted loss of $0.04 per share in the second quarter, which was lower than the $0.07 per share loss forecast by analysts.
