Seatrade Global: VLCC Market ‘Firing on all Cylinders’, Set to Continue Says Poten

04 May 2015: “The VLCC market is “firing on all cylinders” and it is set to continue Poten & Partners say in their weekly report.So far this year VLCC rates have averaged from a high of close $80,000 a day to a low of around $50,000 per day, and Poten noted both Euronav and DHT Holdings posted ‘stellar earnings for the first quarter’. As with the owners themselves Poten believes the strong market is set to continue. ‘The healthy VLCC market is not due to one or two isolated drivers, but the result of a combination of multiple factors that have created a market that we have not seen at this side of the financial crisis,’ the report said. It noted that world oil demand growth had been relatively strong this year. ‘This is in part due to unexpected factors, such as a rebound in European product demand as well as increased growth in India and higher demand for transport fuels in the US. Lower oil prices have also contributed to increasing oil demand’. There has also been no shortage of oil production to satisfy the demand growth.On the shipping side supply growth was seen as fairly limited with six VLCCs delivered so far this year and 28 to come. ‘While deliveries will pick up in 2016, the overall orderbook remains reasonable and expectations are for only modest fleet growth through 2017,’ Poten commented. There has also been fleet consolidation such as Euronav buying the Maersk Tankers VLCC fleet and the General Maritime and Navig8 Tankers merger, which help to level the playing field.”