Am I reading the shipping rate info correctly ... after hitting a top above $100 K a day in the 3rd week of this year, the Suezmax rates have fallen off the end of the table down to less than $40 K a day now? Rates looked to have bottomed last summer in the $20 K a day range. Am I reading this correctly?
I'm not sure I agree. There's an interesting issue driving a worldwide shortage of tanker assets. China ports are clogged with traffic. Tankers are backed up for weeks waiting to unload. As they sit, tanker availability declines. Shipping rates go up.
Apparently the problem in China was a stupid governmental error. China's government diverted rail assets for two weeks to carry people during the massive country migration during China's New Year Celebration. They didn't realize it would cause a massive backup at the ports - leading to a massive backup offshore.
I'm betting that 1. they won't make that mistake next year and 2. The logistics issues get cleared up soon, freeing up tanker assets, bringing supply/demand back into line, and causing rates to decline appreciably.
I'm looking for a big pull back in oil tanker stocks, soon, as this issue becomes more well known and understood.
Yup. But look at the longer term history on the P. F. Bassoe site. The rates a few weeks ago were at record levels. Rates may have bottomed and are going up. At current rates, not to worry, TNP is making a pile of cash.
I need that pullback so I can add more. Osborn, why don't you sell 1/3 of your position and take it into the teens so the rest of us can add some more on the cheap?
I am starting to agree with you on rates bottoming at much higher levels this summer than last. China is a mess from a logistics standpoint. Good article in NYTimes last Friday. Ports are so clogged that ships being forced to wait weeks to unload, including oil tankers. That drives utilization rates down, and demand up ... sending prices higher.
Then we have prospects of Venezula turmoil. If that happens, rates will skyrocket. It takes significantly longer to obtain oil from sources from points further away. Again, demand will increase on a fixed supply, driving rates higher.