Tuesday, September 12, 2006

El Nino depresses oil/ tanker market outlook

7th Sept., 2006
NOAA predicts a mild to moderate El Nino setting in late this year. The condition will sustain over a period of 9-10 months.

Wots El Nino?
Normally the cold currents from poles push the hot equatorial waters to west in pacific sea. But periodically, in absence of strong winds the currents get into reverse gear, giving rise to a hot and wet season on the American continents pacific coast.

1. Warmer than usual winter season in the USA. - lowers demand
2. Weaker Hurricane season in the US Gulf. - ensures un-interrupted supply.

Above factors will work both ends to bring down the oil prices. Also the recent claim by Chevron to hit oil in the US Gulf soften the oil futures.

Today the tanker market is over supplied, which in fact is the call of future as demand for oil grows in leaps and bound. Thus the driving factor for the tanker market is going to be the oil prices presently. In case oil market slumps, tankers gestating speculators dream will have to abort storage operation and get back to trading. These extra units once pressed into already over supplied market will add to the owners misery.

Now it is upto Capt. Bush, Chavez and Ahmadinejad to keep the flag up with their rhetorics or actions...