The booming VLCC tanker market has started to be reflected on the companies’ earnings and is “firing on all cylinders” and it is set to continue Poten & Partners say in their weekly report.
The boom is evident by the rather impressive first quarter results by both Euronav and DHT over the course of the past week. Both companies also said they expected that the strong market will continue to perform as such, during the second quarter of the year as well.
What’s even best is that this state of the market, is not a result of one or two factors, but a combination of a lot, which further solidifies the market’s positive prospects moving forward.
So far this year VLCC rates have averaged from a high of close $80,000 a day to a low of around $50,000 per day, and Poten noted both Euronav and DHT Holdings posted “stellar earnings for the first quarter”.
As with the owners themselves Poten believes the strong market is set to continue.
“The healthy VLCC market is not due to one or two isolated drivers, but the result of a combination of multiple factors that have created a market that we have not seen at this side of the financial crisis,” the report said.
It noted that world oil demand growth had been relatively strong this year. “This is in part due to unexpected factors, such as a rebound in European product demand as well as increased growth in India and higher demand for transport fuels in the US. Lower oil prices have also contributed to increasing oil demand.”