Euronav Bullish on Tanker Market
A robust and sustained recovery in freight rates in both VLCC and Suezmax sectors gained traction during the fourth quarter of 2014 – a feature which has continued and expanded into Q1 2015, says press release from Euronav
The last three months of the year presented some challenges as owners’ confidence was slow to grow and bunker price gains did not materialize within Q4 as bunker inventory was burned off.
However, Euronav delivered creditable returns on our VLCC fleet, where we lost a number of vettings due to the ownership change following the acquisitions, thus leading to a longer time required to book charters.
Meanwhile, Belgian Euronav is Morgan Stanley's absolute first choice among shipping shares in crude oil for the coming year. Several analysts such as Deutsche Bank and Credit Suisse highly recommend the Belgian super-tanker.
The fundamental drivers for the tanker market, supply and demand for seaborne transport are well positioned for the short and medium term. Demand for oil is healthy and growing.
"We believe the fall in the oil price will stimulate demand further in the short and medium term. Vessel supply will remain restricted for at least the next two years. Not only is forecast fleet growth limited in the medium term but there is limited capacity as the financial crisis reduced capacity and productivity in many shipyards. Ton miles are structurally increasing. The Atlantic is effectively long oil – this oil supply is feeding demand from non OECD and especially in Asia and the Far East. Therefore traditional trade lanes will continue to be replaced by longer haul routes with the Far East as their ultimate destination," says the Euronav statement.
So far, in the first quarter, the Euronav VLCC fleet operated in the Tankers International pool has earned on average USD 59,400 per day and 53% of the available days have been fixed.
Euronav’s Suezmaxes trading on the spot market have earned on average USD 40,300 per day and 69% of the available spot days have been fixed.
Euronav has developed into the largest and most transparent tanker platform with 52 vessels on the water today. We have deliberately exposed our fleet to the spot market (86%) with 16,000 open days for 2015 to benefit from what we believe will be a multiyear, growing freight rate market underpinned by a well-capitalized balance sheet and supported by strategic, demand and supply factors.
