Market Update: November 2017
There were no major changes in either the product tanker or Suezmax segments during November.
This was a slight disappointment as the winter market normally starts to pick up in November, but once again, high stocks are curbing demand for shipping. Average income was about $10,000/day for MR tankers and about $16,500/day for Suezmax tankers.
It is our assessment that the overall product tanker market has now bottomed out. The period December to February is highly likely to be characterised by a stronger market, as demand increases due to seasonality, the refineries are in full operation, and the weather also often contributes to disruption at sea and in port.
OPEC extended its output cut during the month (Nov 30), but this is basically a sound measure, as inventories need to come down to more normal levels. Both OPEC and parts of non-OPEC will increase production again in the future (1.2 mbd from OPEC and app. 0.6 mbd from non OPEC), which will also mean a subsequent shipping rate increase. We expect this to start sometime in the middle of next year.