Tradewinds: Tankers Face Tough Time Topping 2015

16 Feb 2016: “…In a separate panel, Poten & Partners head of research Erik Broekhuizen said  floating storage of crude oil is only a small part of the market at this point. He estimates at most only 30 tankers are storing crude at sea and most of those belong to Iran. However, floating storage could provide a floor to freight rates. Given the current forward price curve on crude, floating storage economics make sense when day rates hit the upper $30,000-per-day range. Given the high utilisation, more floating storage can easily push up demand. The impact of more floating storage can be significant,’ Broekhuizen said. “He agrees that oil has shown more price elasticity than other commodities such as coal and iron. But whether low prices can translate to even higher levels of refined products demand remains in doubt. ‘People can only drive so much,’ Broekhuizen said.  ‘Low prices don’t mean people will fill up their tank more.’ With oil prices remaining low, crude supply from some regions will take a hit this year.”