Fairplay: Increases in Underlying Demand are Expected to Benefit Rates

“In this normally sluggish time of the year, the range-bound nature of the main tanker routes has been evident from the disappointments on the widely tracked TD3 (VLCC cargo, Gulf to Japan), where Baltic Exchange panellist quotes have pegged the route as just above W53 (equating to between $14,000/day and $15,000/day, depending on assumptions). In the near term, the closely watched Gulf has seen a build-up of vessels . . . . Analysts at Poten have looked at the impacts of the ongoing restrictions on offshore oil production in the Gulf of Mexico. After noting that increased demand is expected in the US during 2010 (140,000bpd) and 2011 (170,000bpd), they say that ‘the fact that reductions in domestic crude oil output growth are expected to occur alongside a strengthening in US demand means that they will likely lead to an increase in imports.’”