so what happens when the price of oil goes up after production is cut? the same reasoning says that will be a negative of tanke rates.
I don't recall any of any connection between the spread and tanker rates. the spread does affect refiner profits, but that's a different matter.
Numerous t.v. commentators saying Saudis are continuing to flood the world in oil, leaving few places to store the excess. This of course is good for tanker rates and NAT stock price.
There is more likelihood of the US exporting oil than importing more oil, regardless of Iran or the rig count. We just have so much oil already.
So the real issue is how would exporting oil affect tanker rates and NAT?
I see a more efficient tanker delivery network, but I do not see higher rates from this.
I believe it was April 2, the date of my post. I did not check the date of the paper, so it could have been April first.
A NYT article sees higher VLCC oil tanker rates on low oil prices due to longer routes caused by cheaper oil and storage of oil purchased at low prices in Asia.. The suezmax taner rates will rise with VLCC rates.
Dennis Garmin was bullish on tankers this morning on CNBC because of need for more oil storage. Although this involves VLCCs more than suezmax, it will positively the latter's rates as VLCC rates go up.
An oil increase due to unavailability from a big supplier means that oil must be supplied/tranported from other places and that increases demand for tankers. Should put upward pressure on rates.
The cost of oil vaires greatly according to location, with saudi oil the cheapest. But with WTI oil now cheap, it can be transported to compete against cheap saudi oil. This necessarily requires more transport of oil to new markets,
thus pressuring tanker rates upward.
That sounds like an overstatement . I'll bet that some storage uses suezmax tankers from time to time and place to place.
article about storage tanks.
There is lack of transparency as to how revenues will be deployed: dividends, more vessels, or more to NAO.
A big dividend will bring the buyers.
Link is about company with a big european bulk oil storage capacity and its increasing business, toward the bottom of the piece.http://seekingalpha.com/article/2935656-inter-pipeline-delivers-a-44-percent-total-return-in-2014-look-for-25minus-30-percent-in-2015-on-back-of-transport-mega-projects-and-contango-in-bulk-storage?ifp=0
Storage rates will vary by location; not all the oil can be stored at Cushing, or even the US.