Here is an article on VLCC rates from late November.
But with the Brent oil price now 40 percent lower than July, there could be more VLCC fixtures as refiners bought oil for storage, the Singapore broker said.
VLCC rates for the benchmark route from the Middle East to Japan climbed to almost W64.50 on Thursday, up from just under W51 a week ago, the highest since Feb. 18. Rates are the equivalent of nearly $60,500 per day.
Day rates were about $60,000 then.
Now they’re at 5 year highs, over $81,500 per day.
Why is this happening?
Supply is tight, real tight, as is always the case in December. As the Dry Bulk Index implodes, the oil tanker rates explode. Perhaps it has something to do with plunging Brent prices are producers storing crude in these tankers. Longer term, if US production is coming down, due to high cost producers in the shale, it makes 100% perfect sense to believe that we will, once again, begin to import crude from overseas.
Saudi Arabia wins. Yes?
Here are 3 mo charts of the Dirty Tanker Index (unrefined crude) and the Clean Tanker Index (refined product)
The reason why FRO has struggled in recent years is two fold.
1. Debt burden.
2. Lack of volume due to the surge in US oil production.
Well, they just restructured more than $20 million in debt and I don’t think we need to worry about domestic oil production any longer. With oil coming in again, I sold out of BALT for a staggering 27% loss and rolled half the proceeds into FRO. I will deploy the rest of those proceeds on a dip.
In other words, for the New Year to come, I am discarding the losers and starting with fresh ideas.
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Like the Thinking Dr Fly. We recently purchases NAT off of the elevated tanker Rates. They have all Suezmax tankers which are currently about 3X their Average rate from last year. Same thesis…
How many tiNea did I comment here that balt was such a bad trade and investment. Shipper industry is the very worst industry run by the very worst people. Also the world is changing. It is no longer efficient to ship. Further balt was run by the same guy who bankrupt gnk.
Give me your address so I can mail you your prize.
Fly, where does your YTD loss stand as of now, and what are you shooting for toward year end?
mr dawkins, i’m guessing it’s around 17%
Capesize rates are 5k balt will be bankrupt shortly at that rate. Literally bleeding money every day all day. And these idiots just order more and more ships flooding the industry
Playoff? PLAYOFFS? Don’t talk to me about playoffs!
All I want for Xmas is PPT 2.0.
Good thing you dumped GPRO hoss
Fly, you might want to take a look at $DHT. They have the most exposure to VLCC spot rates. They took delivery of 7 VLCCs in September – timing could not have been better. Their current fleet: http://www.dhtankers.com/index.php?name=About_DHT%2FFleet.html
I loaded up on one-day SPY 205.5 puts during last hour. They kept getting cheaper (Stocks put on one of the greatest Short Squeezes I have ever witnessed) Something looks fishy.
Like the oil tanker thesis. Long NAT