14NOV2019 - NEWS - The Spike in Oil-Tanker Rates May Be Over, But a Boom Is Coming
A surge in the cost of hiring oil tankers last month may already seem like a distant memory, but the rally was enough to convince analysts monitoring the industry’s fortunes that a couple of boom years are on the way.
Daily earnings for very large crude carriers, the market’s biggest vessels, will jump to $51,000 next year, according to a survey of 11 analysts by Bloomberg this month. As well as being the highest since 2015, their estimates are also up by 20% from what they were anticipating as recently as August.
Freight costs soared to a record in October on a combination of tensions in the Persian Gulf, sanctions on a giant Chinese shipowner, and vessels being removed from service in preparation for environmental legislation starting in January. While rates quickly slumped again, they remain high by industry standards. And the scale of the rally was enough to shift how analysts perceive the market.