Sorry, you are completely wrong. The owners NEVER make a nickel more just due to the bunker fuel costing less nor do they make a single penny less when it is more expensive. It just passes through 100% to the charterer. Every voyage every ship. The only advantage to an eco design is it is more desirable to the CHARTERER that pays the fuel bill.
Nope. I am saying that rates may continue to climb a bit, but they are likely topped out or close to it. NAT has not yet shown what rates of $40k a day on average for a quarter does to it's bottom line so investors may be waiting to see. HH could pay a huge dividend with the extra $37 million they will have from this Q or he could buy some NAO (he has) or order more tankers (he has) or buy a second hand tanker which he might. He's full of surprises.
Suezmaxes are hardly ever used as storage. VLCCs hold twice as much. Some more than that. Here's the math.... A VLCC holds 2 million barrels. If the owner charges $50000 a day to a trader for storage, that is 2.5 cents per day, per barrel. So you want to use it long term? You have to be sure you will get more than an extra $10 per barrel more if you plan to store it for 400 days. And you lost the use of $100 million dollars for a year if you got the oil for $50 a barrel or you paid interest on it the whole time.
WS is irrelevant. The financials are reported using TCE. Simply look at the quarterly report. First line is NET voyage revenues. These are the revenues after voyage costs (bunker fuel, port and canal fees) are removed. It is a very simple concept. The charterer pays the fuel bill. Sometimes the owner writes the check and the charterer pays him back, in effect. But the simple fact is, the owner does NOT make a penny more or less as oil goes up and down.
What I am saying is that intertanko quotes ONE route in their daily snippet. And NOBODY is slow steaming now so that quote for 6 knots is rubbish.
No, not all of them, of course not. But they are booking at triple their import needs. And it isn't NEAR 7 million a day, it is barely 5 million per day.
NAT does NOT operate those vessels which are getting $83k a day. And rates in pre-2008 got to $250,000 a day for VLCCs. Stockpiling is happening. Problem is the country doing it is almost DONE. There is NOT unlimited capacity to store oil. China is said to have about 300 million barrel capacity for their SPO. They had over 100 million stored before oil crashed and have taken 80 cargoes in the last month of 2 million barrels each, pushing up rates. Soon, very soon, they are done and all those ships go looking for cargo.
Wrong. Fuel is NOT. It is a voyage expense and it is a pass through. It neither helps nor hurts profits. WHY in the WORLD would all the shippers on the planet report results as TCE if fuel was an operating expense? It doesn't even FIT into the operating expense column. 22 times $20,400 a day times 92 last quarter was the fuel costs. Where EXACTLY do you see this $41,289,600 in "operating expense"? The NET operating revenue was not even this much last quarter.
Oh, and contango? , it looks like a non-starter. Futures down the road are coming in hard. You need to get $10 a barrel more to store the stuff for a year just to pay the tanker owner if you can get one for $50k a day for a VLCC.
Best be very nimble. Rates will NOT hold. Chinese filling their SPO is the only reason VLCC rates have jumped. They are almost done. They have the first phase filled a long time back, 91 million barrels. The second phase holds 170 million barrels. It will be fill fast and just recently was completed. Third phase is years out.
"This should be a strong positive near-term for the crude oil shippers like FRO."
WHY do you think that?
"Rates" are NOT above $80000. A RATE is. The AG to Japan rate. For others, less. For Suezmaxes, half that. For afras, $10k less. And here is the BIG PROBLEM about to smack tanker investors upside the head. China is nearly done stockpiling crude. Their first phase storage of 91 milliion barrels is full. Has been for a long time. The second phase of 170 million barrels is about full as they have taken about 80 VLCCs in the last few weeks. The third phase is years out. When all those VLCCs unload and become available again, rates will crater and HARD. Enjoy the pop but don't bet on it lasting very long.
A VLCC uses 100 tons of bunker fuel a day. A suezmax uses 60 tons. About. So with IFO 380 (bunker fuel) at $340 average across the five major oil loading and unloading ports, the fuel usage daily for a Suezmax is $20,400. With the operating costs of NAT's fleet at $12,000, G&A at $1600 per day per ship, this all would mean that at $34,000 daily "rates", NAT would make nothing IF bunkers were included in the calculation. They are not. Fuel is not figured in. It is just a pass through. Not good, not bad. It lowers the top line when fuel is low and it raises it when fuel is high. Does nothing to the bottom line.