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Demand: The dynamic nature of the product tanker market, where refinery locations, local market demand specifications and price arbitrage trades are constant moving objects, turn one main trade into a minor trade within a New York minute.
The market for crude oil tankers hasn’t been particularly upbeat in the first half of the year. Product tankers however have delivered very decent returns if judged by their performance during the last 7 months.
Strong demolition activity dampens fleet growth, while stable US demand supports optimism as we head into the “peak-season”
The tanker market is doing full steam ahead – not in relation to demand, earnings or actual operating speed, but in relation to structural demand changes in the West.
Overall annual oil demand growth in 2012 is now expected to come in at 0.9% by the IEA (+800,000 barrels per day), close to last year’s 0.8%, which was a 10-year low (excluding the contracting years of 2008/2009). The rise is exclusively originating from non-OECD countries. The outlook was modestly curtailed by early July on the back of the weaker global economic situation. This translates into a rather slim fundamental support to the tanker segment, but fortunately tanker shipping is so much more than overall oil demand.