Confidence is growing in the VLCC market with spot rates climbing to the highest level since the first quarter this year.
The spike has yet to translate into other tanker sectors but analysts believe it is a question of when rather than if they follow suit.
Clarksons Platou Securities yesterday placed VLCC rates at $28,500 per day, above the $22,600 per day average in the year to date. Today, they climbed further to pass $30,000 per day.
Its team, led by Frode Morkedal, said there was strong momentum in the crude market.
Howe Robinson Partners placed earnings of eco VLCCs at $35,091 per day, again above the $28,917 per day average for 2019.
“VLCC rates are well up across the board as refinery buying is picking up,” said analysts at Arctic Securities.
“The impact yet to spread to suezmaxes, and certainly not aframaxes, but that is only a question of time, assuming our thesis of continued demand growth is correct,” said Jo Ringheim.
“US crude discounts narrowing rapidly, reflecting the imminent start-up of new pipeline capacity.
“This will add to VLCC demand in coming weeks and months and will be amplified further this fall as new project startups in Brazil, and ultimately Norway, come to the market.
“Against the background of rising refinery demand and growing supply elsewhere, lower Saudi exports is not going to keep the tanker market down.”
Hugo de Stoop, chief executive of Euronav, said there was disappointment at some of the rates booked in the third quarter but the market was still expected to turn.
“As a matter of fact, it has already started to turn modestly and we hope that the trend will continue to improve as we get nearer to the winter,” he said.
“We're certainly seeing some refineries coming back after much longer some preparation or maintenance programmes than usual.”
