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Growing U.S. energy independence is driving the biggest drop in crude imports in two decades and...

Growing U.S. energy independence is driving the biggest drop in crude imports in two decades and rates for the oil tankers most reliant on the shipments to the weakest in at least 16 years. Domestic oil is crowding out west African imports; combined with a capacity glut causing rates for some ships to average less than operating costs, analysts say it's a tough near-term outlook for the likes of Teekay (TK) and North American Tanker (NAT).
Comments (2)
  • Im long NAT and underwater for now.
    2 Jul 2013, 01:01 PM Reply Like
  • if the West African crude doesn't go West, then it will go East. The latest estimates from Poten & Partner's say's the market may need an additional 96 VLCC's over the next 5 years to carry crude to Chinese refiners.
    from Hellenic Shipping News:
    "China has plans to add another 4.2 mbd of crude refining capacity by 2018. The outlook for refinery capacity suggests that the appetite for VLCCs in China could grow. The best-case tonnage demand scenario could result in 31.3% growth over the next 5 years. Actual refining capacity greatly outpaced 2009 estimates, providing much needed support for VLCC trades. However, given the current prognosis for Chinese demand, it is questionable whether today’s planned refining capacity will actually be built.
    The trade routes from West Africa and the Arabian Gulf to China are the busiest routes by a wide margin, accounting for 94% of all seaborne crude imports to the country, using the reported spot market as a proxy. Based on our calculations for VLCC demand, an additional 96 VLCCs could be required to service these trade routes in order to meet planned increases in refinery capacity. If these plans come to fruition, this would obviously provide a significant boost to VLCC demand by essentially doubling transportation requirements.
    link complete article:
    http://bit.ly/19WgX5U
    Although it is hard to identify a trade more suited to large ship tanker demand, China’s growth in share of VLCC demand appears to be all but guaranteed at this stage. VLCC owners should be cautioned to weigh against the potential versus the likely", Poten concluded."
    3 Jul 2013, 03:57 AM Reply Like
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