While there was a tempered level of optimism from Braemar ACM Shipbroking research head Henry Curra, senior tanker owner executives remained bullish. Curra presented both bullish and bearish cases for tanker prospects in 2016 but concluded that the market “has legs”, despite arguing that 2015’s surge in oil demand, including stimuli such as increased OECD refinery utilisation and increased use of commercial storage were “unrepeatable”.
Euronav ceo Paddy Rodgers gave a resolutely positive evaluation. “You don’t have to apologise for being bearish in this market,” he said. “We had a really bad opening to the year on the capital market, but oil has never been about the capital side, it’s always been about the operating economy.”
Predictions for 2016 demand growth have ranged between a International Energy Agency (IEA) predictions of 1.2%, and more optimistic proposition of 1.9%. However, Rodgers declared: “I’ll be quite happy with 1% demand growth," and argued that the IEA has "once again undercooked demand."
Commenting on the risk of oversupply, he continued: “Price determines buying behaviour. At 1.9% (demand growth) we’re going to have easily enough demand to absorb the extra tonnage.”
“Coming from Russia, people were probably expecting me to be one of the bears,” joked Nikolai Kolesnikov, evp and ceo of Sovcomflot. “But we’re really quite bullish. I don’t think things will start changing dramatically over the next 2-3 years.
“We’re witnessing a certain crisis of many international institutions, OPEC being one of them, but I don’t see them cutting production. It is vital that they continue pumping oil in many countries, and that oil has to be transported.”
Ridgebury Tankers ceo Robert Burke described the current oil market a “War of attrition”.
“Everyone has invested in energy and nobody is going to give up on the price war,” said Burke. “It’s going to last longer than anyone thinks. Countries in price war have long term view – the Americans, the Russians, the Saudis. People do not start a price war with a time horizon of 12 months. The
possibility of supply cut is unlikely.”
“People just have to stop being such willing buyers of bad news,” maintained Rodgers, referring to the dire predictions based on the first weeks of 2016. “It’s not a trend, it’s not an indicator of the market – stop looking at the tea leaves and get back to work.”
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
