Poten & Partners - Tanker Opinion

Poten provides brokerage and consulting services to the energy industry. On its site, Poten offers energy industry news, but more importantly, plenty of opinions about just about everything related, including oil tanker rates.

Tanker Opinion

An informative piece on recent topics in tanker shipping written by Poten Analysts.

• After the Stock Build  11/05/12
  In this week’s Petroleum Status Report, the US Energy Intelligence Agency (EIA) reported that US commercial crude inventories rose a higher-than-expected 3.7 MB last week, to 379.5 MB, the highest level since 1990. Crude oil prices declined on the news, also confronted by electoral uncertainty and recessionary conditions in Europe and weaker Chinese economic statistics. US crude stocks have jumped by 14.3 MB, or 511 kbpd, during the past four weeks, supported by a 3.5 MB rise in Cushing stocks, still awaiting an outlet in the Seaway pipeline reversal that starts on May 17th. Still, US crude inventories excluding Cushing, at 335.4 MB, are near previous peaks in the weekly data.
• Zombie Refineries 04/05/12
  Theeey’re baaack. Atlantic Basin refineries that the market had relegated to the graveyard of unfit plants in an expanding world of more-sophisticated Pacific Basin capacity, are coming back to life under new management. During the past week, three announcements reminded market participants that refinery capacity is hard to kill. Delta Air Lines Inc. agreed to buy the 185 kbpd Trainer, PA refinery from ConocoPhillips (Phillips 66) for $150 million. Vitol and the co-founder of Petroplus have jointly agreed to acquire insolvent Petroplus’ 68 kbpd Cressier refinery in Switzerland for “substantially less than $50 million”. Finally, trading firm Gunvor announced that it will be restarting Petroplus’ 108 kbpd Antwerp refinery this month, after agreeing to purchase the plant in early-March this year. The following chart illustrates these restarts, following the 1 mbpd capacity purge of 1q12.
• Naphtha Redemption for LR1s? 27/04/12
  After languishing below operating costs for almost six months, LR1 earnings on the benchmark Baltic TC5 route, carrying 55,000 MT of naphtha AG-Japan, have more than doubled during the past two weeks, to above $13,000/day. The LR1 sector has suffered recently from brisk fleet growth, rising by 7.9% during 2011; slowing Asian industrial production growth, limiting petrochemical naphtha demand; competition with MRs for new Indian refinery naphtha production and elusive arbitrages. After collapsing to $1,000/day in October 2011, earnings on the TC5 route recovered slightly, but averaged only $5,200/day for 1q12. This performance has prompted growing disenchantment with the sector, with expectations for 2012 sliding steadily, as demonstrated by the decline in implied TCEs from the TC5 contract for 2q12.

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