TANKERS, OIL AND CHEMICALS

The tanker market recovery everyone is talking about

Published 26. Nov 2021 6:09 AM

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For a long time there have been talks about a recovery of the tanker market and many industry operators and experts have publicly said that they expect the recovery to come no later than Q1 2022

Only a few weeks ago Hugo De Stoop, CEO of Euronav said that he believes a return of the market is right around the corner. This came on top of Euronavs Q3 reporting, which revealed the company has a noticeable 266 MUSD loss year to date.


The driving force behind a tanker market recovery is the belief that the increasing demand will lead to an increase in ocean freight and eventually kickstart the market. One of the highlights from the IEA November oil market report is that the world oil supply is set to rise around 1.5 mb/d over November and December month. Much of the additional supply will come from the US (400 kb/d) and Saudi and Russia combined (330 kb/d). The supply will be adding to some of the seasonal increase in demand, however, it should also help provide some further relief to oil prices.



WTI futures price chart at time of writing.

US Energy Information Administration is among the ones that forecast falling oil prices in 2022. EIA estimated that oil demand outpaced supply for five consecutive months, leading to oil prices above USD 80/b.
With a potential for lower oil prices in Q1 2022 and demand continuing its recovery, there is reason to believe that many countries will increase imports and add to their decreasing inventories.
This and the continued growth in transportation and travel could potentially lead to the tanker market comeback in 2022 which everyone is talking about.

Sources:
https://www.worldoil.com/news/2021/11/18/us-eia-projects-declining-crude-oil-prices-during-2022
https://www.iea.org/reports/oil-market-report-november-2021

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