Teekay Market Analyst, Christian Waldegrave notes in his latest conventional tanker market report that there has been very strong growth in non-OPEC oil production around the world this year, particularly from the United States, which has lead to lower long-haul crude tanker demand. In fact, Waldegrave points out that crude imports are at levels not seen since 1991.
Compounding the issue has been a particularly heavy amount of refinery maintenance happening around the world.
In the Aframax sector, Waldegrave notes that things haven’t been as bad as the large crude market, yet rates are still weak with higher volatility.
On the products side, the LR2 sector has done fairly well this year with higher movements of Naphtha to Asia.
Waldegrave predicts that demand will improve throughout the second half of the year as refineries come back online and as the supply and demand equation improves. Looking into 2014, fleet growth will be at its lowest level since 2002, notes Waldegrave, and combined with improvements in the economy, greater fleet utilization will hopefully result.
For more detail on the conventional tanker market, listen to the latest Teekay Market Update below: