The OPEC cuts and what some of our favorite shipping seer’s are saying.
First, a quick note about our relationship with the analyst/broker community.
The analyst’s and ship brokers that send me their work have learned over the years that I can be trusted to present bits and pieces of the reports without letting out too much of the proprietary data. Said differently, I will extrapolate and paraphrase vs. cut and paste. I am not in the business of giving away another persons work. To reap the full benefits of the seer’s you should consider employing the service outright.
Greg Lewis – Credit Suisse
“An OPEC cut is a negative for tanker rates.” Greg goes on to point out the Saudi’s who normally ship export crude via VLCC’s through the AG will lose the most fixture volume. He also points out the deal vaguely outlines potential increases for other OPEC members that should partially offset the cuts in production.
Rob Perri – Axia Capital Markets
So, an OPEC Cap also happened, as on Wednesday night OPEC announced it would cap production at around 32.5 to 33.0 million barrels per day (in August OPEC produced 33.2 million barrels per day so this is up to a 700,000 barrel cut). VLCC rates rose 24.7% this week to $10,580 per day from $8,483 last week, while Suezmax rates increased another 27.3% to $38,397 per day from $30,157 per day. Aframax rates rose 38.2% to $16,839 per day from $12,185 last week.
Mike Webber – Wells Fargo
OPEC Clan Reunited? Still Hazy, But Any Regained Stability Helps
Positive For Marine MLPs/GPs/LNG, Marginal Negative For Tankers. OPEC Cut Agreement Seems Real, But Details Are Still Sketchy…First – What Do We Know? The details around the agreement are still hazy…Impact On Our Marine MLPs/GPs/LNG Names? We view the general notion of OPEC beginning to reestablish some control of pricing as a net positive for our Marine MLPs/GPs…Impact On Crude Trade Flows? Well, we had expected roughly 600-900 KB/d of incremental OPEC production in 2017E to support tanker tradeflows, mainly from Iraq and Iran….Impact On Our Tanker Names? Marginally lower volumes are obviously a negative for crude tankers, however…The Price Signal To North American Inland Producers Could Hurt Tanker Ton-Miles, Probably Neutral For Jones Act.
Andreas Wikborg – Arctic Securities
Vague OPEC deal can impact tankers in several ways / Dry bulk: State of confusion/ LNG: Spot rates remain at ease, but winter demand is on the rise…”Apart from details about the important monitoring and compliance issues (which have historically been poor, to say the least), the big question is still if the bulk of the burden will fall on Saudi, or if output from producers such as Iran and Iraq will be impacted heavily as well. Iran in particular is still aiming to boost output to pre-sanction levels north of 4mbblspd, and has until now been the piece to the puzzle that wouldn’t fit.”
Note: Seer pictured is none of the above mentioned seer’s.