NAT Says Tanker Market is Volatile
Nordic American Tankers Limited (NAT) claims to enjoy the advantages of a homogeneous Suezmax fleet. Operationally, strategically and financially, NAT and its worldwide customers and shareholders benefit from having 30 identical vessels on the water with excellent quality.
The development of the world economy affects the tanker industry and the demand for oil. A low oil price is positive for the tanker industry. The strength of the Far Eastern economies, including China and India, is often underestimated by observers in the Western world. NAT is active in the Far East and does business with major oil companies in the area.
The Suezmax fleet of the world (excl. shuttle tankers) counts 478 vessels at the end of 2Q2017, following an increase of 17 vessels in the 2nd quarter of 2017.
The current orderbook of Suezmax tankers stands at 62 vessels from now to the end of 2018. This represents about 13% of the Suezmax fleet. Slippage and cancellations may take place, thereby reducing the orderbook. 2016 saw a fleet growth of 6.0% with no scrapping of vessels.
The supply of tanker tonnage is inelastic in the short term. When there are too many ships in an area, rates tend to go down. When there is scarcity of ships, rates tend to go up.
"As a matter of policy we do not predict short term spot tanker rates which may be expected to be volatile. Going forward, we believe that NAT is well positioned," the company said in a press release.
