MSI forecasts limited winter upturn for crude tanker market

Improvements last month to VLCC spot rates and time charter rates could be short-lived, consultancy Maritime Strategies International (MSI) has warned.

It forecast a limited winter upturn, but was less optimistic on short and medium term risks.

MSI Senior Analyst Tim Smith noted that “Donald Trump’s victory in the US presidential elections isn’t likely to have a huge effect on the market in the near term unless it destabilizes the U.S. economy. In the longer term there is clear risk to shipping should protectionist policies be imposed, whilst domestic energy production in the U.S. could be further encouraged as red tape is removed. More immediately on the agenda for the tanker market is the OPEC meeting at the end of November.”

For the VLCC rate improvement to be maintained into Q4, MSI said that the market would need to see substantial Asian demand, particularly from China.