Milton Financials: Too many supertankers, too little crude.

Oct. 25, 2010 - PRLog -- Supertanker owners are bracing themselves for the longest stretch of unprofitable rates in 17 years Milton Financials research has revealed, as new vessels are joining the fleet nine times faster than demand for oil is increasing.

Shipping firms are earning $3,155 a day for a single voyage, ninety percent lower than the $30,900 that the globes biggest operator, Frontline Ltd. say is required to break even.
Global financial services firm Morgan Stanley believes the tanker fleet will expand by about 13 percent next year and the International Energy Agency (IAE) is only expecting a 1.4 growth in the use of oil.

Recent research of which Milton Financials is aware has confirmed that tanker owners have responded by cutting average speeds by 9 percent since March and anchoring 24 percent more vessels since January.

“Investing in tankers right now is a bad idea,” a broker at Riverlake Shipping SA in Geneva told Milton Financial sources. “When people say oil-consumption has increased by some tiny amount, I laugh. It corresponds to a minuscule amount of extra ships, and there’s far more coming out of the yards.”


The international oil-tanker fleet will grow by 86.5 million deadweight tons in the next two years, equal to about 27 percent of existing capacity, according to Morgan Stanley estimates. The world’s largest ship broker says that the additional ships being constructed by yards including Shanghai Waigaoqiao Shipbuilding Co. and Dalian Shipbuilding Industry Co., will exceed the previous record of 79.8 million deadweight tons set in 1974 and 1975.

Seventy-five percent of shipbrokers and owners involved with a recent media survey say unprofitable rates for these supertankers, each bigger than the U.S.’s Chrysler Building, will last at least two years.

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