One over-reaction leads to another
Tanker market has just witnessed a grand Q3 of year 2015. In an
over-reaction to the US decision to finally lift the sanctions on Iran, crude
oil prices stooped to the levels they didn't deserve thereby setting in a strong contango mood in the market. The result was obvious - a mad rush for storage.
This sudden demand in tanker market has catapulted tanker freight rates to the
levels last seen in 2007/8.
Some guys born at mid day (highly optimistic) are already crying the oil will hit USD200pbbl from here. But the market indicators are suggesting otherwise. Piling inventories, growing supplies, slowing economies, and advancing technology are casting dark shadows over wishful optimism in oil market. Besides, at some point in time, global warming and oil prices will tend to have the same relationship as sugar prices in a diabetic world unless the world resigns to the consequences. Thus sooner or later the oil traders will fall on the backfoot and so would the tanker freight rates.
Some guys born at mid day (highly optimistic) are already crying the oil will hit USD200pbbl from here. But the market indicators are suggesting otherwise. Piling inventories, growing supplies, slowing economies, and advancing technology are casting dark shadows over wishful optimism in oil market. Besides, at some point in time, global warming and oil prices will tend to have the same relationship as sugar prices in a diabetic world unless the world resigns to the consequences. Thus sooner or later the oil traders will fall on the backfoot and so would the tanker freight rates.
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