Oil prices may be in the dumps, but the good old days weren’t so long ago for companies that haul crude around the world. They got a recent, if fleeting, reminder of happy times.
On some measures, 2015, was the most lucrative period for chartering supertankers known as “very large crude carriers.” Daily rates touched $100,000 on some routes, according to Teekay Tankers. Prices crashed by more than half by this March as refineries went into maintenance and newly-built ships came onto the market. But a massive tanker jam off of Iraq’s main oil facility plus weather issues in China helped rates double at the end of last month.
The rejoicing in tanker-land was brief, though, as the market has given up nearly all those gains. And it may get worse: buyers have no place to put extra barrels yet futures prices are no longer conducive to using supertankers as floating storage. And a surge of new tankers late this year, ordered when times were better, may depress rates further.
Hope truly floats.
Source: Wall Street Journal