The Stock Story

Just when some were beginning to think the tanker market had begun its decline, spot market rates have rebounded across all markets. In particular, rates in the Atlantic Basin have been at the famed “fourth quarter 2004” for a couple of weeks. In our Tanker Opinion, “The Knife Edge”, we addressed the lack of VLCC availability in the Arabian Gulf that sparked the jump in rates, but the longevity of such a rally is really defined by market fundamentals. The chart below compares the weekly crude oil stocks in the US for the past three years. In general, crude oil stocks in the United States can serve as one indication of where the tanker market may be headed in the coming weeks. With VLCCs on some trades already surpassing the $200,000 per day mark equivalent (TCE) basis, some charterers may be beginning to wonder just how much more upward rates movement can be expected.