Oil analyst says that the current tanker capacity for oil is going to see a 1/3 increase in capacity with the addition of ships to be added during the next 12 months. This when total demand for capacity will not change during the next two years.
Since the rental rates are down 75% from last summer this is not good. If most of the oil tanker companies do not make money during the next two years, but lose money, this sector will be down and no company will be strong enough to buck the sector trend.
Not a time to buy during the next year. I'll stay away from oil tankers. Was looking to make an investment but all I have seen is negatives for this sector.
is that the same analyst that said oil is going to go to $200/barrel? Just look at the recent oil price and let me know what you think about the supply/demand pattern. when you make claims like this, you better come with something that support your claim. A link might be helpful.
I think there is a difference in guessing on the future price of a commodity and reading shipping trade journals where the ship yard construction is monitored.
I do not remember the name or the article where I read the story on world wide shipping construction on tankers.
I read another article where Iran is going to acquire its own fleet instead of depending on outside shipping companies to move its oil to market.
Google Iran oil tankers and you should be able to see the article I read about 15-20 tankers being delivered to Iran's national oil company during the next 6-12 months. This oil company could end up with a bigger fleet than TNP over the next few years.
The point I am making is that ship building yards are building lots of tankers and the supply is going up and going to create a surplus. It is bad enough that oil tanker rates have declined 50% or more. Increase the supply of these things over the next 1-2-3 years and you have a major problem developing for tanker companies.