For example, Herbjorn Hansson, chairman and chief executive of Nordic American Tankers (NAT), told shareholders recently that lower oil prices "...may trigger stockpiling, or have a more general positive impact."
"We see a clear increase in demand, especially from the East and the oil is also carried over longer distances. There are very few idle ships out there now and the market is much tighter," he told Reuters.
The International Energy Agency forecast last week that global oil stocks will continue to build and could take up all the storage capacity next year. This could encourage floating storage, some reports suggested.
"Once we have gone into 2015, there may come a point when the rapid build-up of surplus crude in the market will open opportunities for floating storage. This scenario is a further positive for VLCCs," leading London broking house Gibson told Reuters recently.
A 2009 contango led to over 100 mill barrels of oil being stored afloat.
"One would need a contango in the oil market to justify floating storage. Given the current developments in the oil market this cannot be ruled out," said Svein Moxnes Harfjeld, co-CEO of DHT Holdings.
"Continued oil demand and longer transportation distances combined with no fleet growth should support our expectations for 2015 on average to be better than 2014. If floating storage takes place, this will be an additional benefit," he told Reuters.
Elsewhere, the US Maritime Administration (MARAD) is considering how the country could export crude oil and natural gas from deepwater ports.
The domestic drilling boom has added pressure on Washington to relax trade restrictions and approve crude oil exports, although this could be some way off.
MARAD is seeking comment on a proposed policy to evaluate applications for building and operating offshore deepwater ports for exports.
In another possible boost to the charter market, Rosneft and Essar have signed agreements to supply crude oil and products supplies to the latter’s refineries in India. Shipments could begin next year.
Turning to newbuilding activity, Scorpio Bulkers is to switch six Capesize bulker newbuildings into LR2s, four of which are to be sold to Scorpio Tankers (STI) for $51 mill each while STI will also hold purchase options for the remaining two at $52.5 mill each. The vessels are due for delivery through 2016.
In addition, STI has confirmed the sale of the post-Panamax tanker ‘Venice’, plus the LR1s ‘STI Harmony’ (2007 built LR1) and ‘STI Heritage’ for about $74 mill in total.
STI said that it will record a write-down of around $2.6 mill in the fourth quarter of 2014.
Oman Shipping is rumoured to be close to signing a contract for up to eight LR1s at STX, according to TradeWinds.
Angolan national oil company Sonangol has ordered two Suezmaxes from Daewoo Shipbuilding & Marine Engineering for about $70 mill each.
The two tankers will be delivered by the South Korean yard in 2017. DNV GL will supervise their construction.
Tanker Investments (TI) is to acquire six Suezmaxes for an en bloc purchase price of $315 mill.
The six comprise four, 2009-built and two, 2010-built Suezmaxes constructed by Rongsheng Heavy Industries. They are expected to be delivered to TI during the first half of 2015.
TI said that it intended to finance the full purchase price by drawing on credit facilities to be secured by the company’s existing fleet and the new Suezmax fleet.
All of the Suezmaxes will have completed their five-year drydocking. Upon delivery, they will trade in the Gemini Suezmax Pool.
“We are pleased to announce the acquisition of six, high quality, modern Suezmax tankers representing another milestone in the development of Tanker Investments’ fleet which we have now grown to 20 vessels,” said William Hung, TI’s CEO. “With an average fleet age of only 4.3 years, our modern fleet is well positioned to benefit from further upside driven by an improving tanker market underpinned by solid demand and supply fundamentals.”
Although not naming the seller in the statement, it is probably another of the Teekay- affiliated companies.
In addition, Teekay Tankers has bought four coated Aframaxes and one uncoated Aframax for about $230 mill in total.
The five vessels, which are expected to be delivered in the first quarter of 2015, were constructed in 2008, 2010 and 2011 in Japanese and Chinese yards. Upon their delivery, the vessels will trade in the Teekay-managed Taurus LR2 Pool and Aframax RSA.
"We are pleased to announce this acquisition of five, high quality, modern secondhand tankers at an attractive price, which, when combined with the increase in our in-chartered fleet over the past six months, is consistent with our stated strategy of increasing our exposure to an improving spot tanker market," said Kevin Mackay, Teekay Tankers CEO. "Combined with our existing fleet and in-chartered portfolio, these new vessels will increase our fleet size to 43 vessels. In addition, the transaction provides optionality to trade the four coated Aframaxes in the crude, or product tanker markets and, with an average age of only 3.8 years for the five vessels, enhances the age profile of our fleet.
"Spot tanker rates for crude and large product tankers for the fourth quarter of 2014 are averaging higher than the previous quarter. Increased seasonal oil demand, winter weather delays and lower global oil prices, which is encouraging stockpiling of crude oil and resulting in lower bunker fuel costs, are some of the key factors that are driving spot tanker rates higher," he explained.
To fund the purchases, Teekay Tankers plans to offer 20,000,000 shares of Class A common stock in a public offering. The company said that it expects to grant the underwriters a 30-day option to purchase up to an additional 3,000,000 shares of Class A common stock.
Teekay Corp is also purchasing $20 million of Class A common stock of the company at the same price per share to the public offering.
Teekay Tankers said that it expects to use the proceeds, plus the proceeds from Teekay Corp’s investment to partially finance the acquisition of the Aframaxes and for general corporate purposes, which may include funding future vessel acquisitions.
On Friday, another rumour was circulating suggesting that Teekay Tankers was close to making a major investment in a fleet. No other details had come to light at the time of writing.
In other S&P news, Parakou was said to have snapped up four newbuilding SPP MRs for $37 mill each.
It has been reported that the sale of the Aframax ‘DL Bellflower’ for a conversion project failed (see last week’s news). She has since been committed to Sinokor for $18 mill, brokers said.
The 2012-built Suezmax ‘Skamandros’ was said to have been sold to ADS for $65 mill, while the 2006-built MR ‘Challenge Plus’ was reported sold to Minerva for $17.2 mill and the IMO III 1997-built MR ‘Maersk Clarissa’ was believed to have been sold to Far Eastern interests for $8.5 mill.
In the charter market, Mjolner was said to have fixed the VLCCs ‘Cosglory Lake’ and ‘Nave Celeste’ for 12 months at $33,000 per day each.
Scorpio has announced charters for a number of newly delivered vessels - ex yard. These include the LR2 ‘STI Condotti’ fixed for 55 days for $30,000 per day, the MRs ‘STI Battery’ and ‘STI Soho’ for 120 days at $18,000 per day each and the Handymaxes ‘STI Finchley’, ‘STI Clapham’ and ‘STI Poplar’ for 120 days at $14,000 per day each.
Navios Maritime Acquisition Corp has announced that the MRs ‘Nave Pyxis’ and‘Nave Sextans’ have been chartered out for three years for $16,294 net per day. The charterer was not revealed.
Angeliki Frangou, chairman and CEO explained, "The rate environment for tankers has materially improved and we have taken advantage of this dynamic by securing three year charters at attractive rates. As the rate market evolves, we would expect to re-balance our charter periods to include longer term contracts when available."
Elsewhere in the charter market, Repsol was believed to have fixed the 2008-built Suezmax ‘Aias’ for three years at $26,500 per day with delivery in February 2015. Eni was said to have taken the 2004-built Aframax ‘Pantelis’ for 12 months at $25,250 per day.
Penfield reportedly fixed the LR1 ‘Radiant Sea’ for 12 months at $16,500 per day, while Stena Weco was thought to have fixed the 2009-built MR ‘Ridgebury Cindy A’ for 12 months at $15,250 per day.