FIS: Tanker Market Overview: Happy days are here again for freight
Tanker freight rates improved on recovering oil demand and benefited from the high crude oil prices above $100/bbls that supported better margins.
However, the profitability was most clearly seen in the mid-sized crude carriers like MR and LR1/2 that went up to record levels in May.
The supply tightness of oil inventories like middle distillates also supported the freight rates with lots of re-routing away from the Black Sea, due to the Russia-Ukraine conflict.
The spot earnings of Suezmaxes and Aframaxes averaged about $37,000 and $63,000 per day, respectively, for the non-scrubber fleet between March and mid-May, according to data from Clarksons Research.
As such, the earnings of Aframaxes had tripled from the 10-year average over the Mar-Apr period, while VLCC earnings remained weak to almost breakeven levels or lower, based on non-eco vessels.
However, the earnings of scrubber-fitted eco VLCCs are likely to fare better in the high bunker price environment, which may improve further in the current situation of an increase in tonnage miles.
Technical view of the tanker market (TD3C):
June Futures – We noted last week that the downside move below USD 9.0323 alongside weakening momentum had warned that the USD 8.2730 resistance is now vulnerable.
The futures continued to trade lower to USD 8.5690, before finding light support, putting the price back on the 8-period EMA at USD 8.7750.
The futures have now formed a fractal resistance at USD 9.2610. Upside moves above this level will create a higher high, meaning the futures will be bullish above this level.
Downside moves below USD 8.2730 will mean the technical is bearish, warning the USD 7.5730 and USD 7.3750 support levels could be tested. Technically neutral, the RSI and its moving average remain below 50, warning the USD 8.2730 support remains vulnerable at this point.
Written by Titus Zheng Shujian and Edward Hutton, Edited by Chris Hudson (https://freightinvestorservices.com/fis-live/).
