Tradewinds: Saudi Moves Fuel Tension Between Tanker and Oil Demand

“For Poten & Partners research head Erik Broekhuizen, the Opec production glut is not likely to push the tanker market upwards but it avoids the downwards push otherwise suggested by the demand numbers. There will be more oil on the market than the oil market weakness would have otherwise allowed for, he says. “However, it remains to be seen how long US shale-oil producers will hold out before they buckle under low oil prices. Although break-evens vary widely in shale plays, many would remain profitable at $80 oil, with break-evens in the Eagle Ford Shale and Permian Basin, for example, sitting below $50 per barrel, analysts note. “‘I don’t think there will be an immediate impact on the shale oil,’ Broekhuizen said. ‘However if this persists for a longer period of time, several months or longer, you might see some of the shale-oil producers cut back.’ “He expects the depressed oil prices to last only a few months, and even those shale producers who ramp down production may be able to bring it back online just as quickly.”