October 27th, 2017

The Aframax tanker market has been under the same depressed conditions as most of the crude segments, and faces some additional headwinds. The flow of oil out of Mexico and Venezuela are both critical to the strength of Aframax returns in the Atlantic Basin. Venezuela's exports have been disrupted by financial issues, quality deviations, and other critical infrastructure problems. This has reduced the number of Caribbean to US Gulf voyages. Mexican crude production continues to trend structurally lower as well. This is another key source of cargoes for TD9 voyages. In spite of these declines, Aframax returns have rebounded from the lows seen earlier this year. The best way to see why is to the look at the trade flows out of the US in context with the shipments in. The exports of crude oil from the States have more than offset the drop in Caribbean imports. The size of ships being used varies for these exports, but the strength of Suezmax and Aframax returns have always been correlated in the Caribbean and US Gulf. Some of the rate increase for Aframaxes is seasonal as normal delays are dragging down the supply of available ships. All eyes remain on the autumn/winter markets right now to see how they compare with last year. Owners should remember that in spite of some negatives crude trade flows are supporting them.

Court Smith - Senior Analyst Skype/Yahoo: czx9courtVisit the Website for Additional Market Commentary - https://czx9court.com

Shipping Intelligence& Analytics

Softer price sentiment this morning for crude oil, but overall a week of increases for the benchmarks. The US rig count will be released at 1pm EST today. It should be watched closely to see if the trend in lower oil rig utilization that began in July continues. Venezuelan crude production continues to slip, down from over 2mn b/d at the start of the year to an estimated 1.85mn b/d.

Corpus Christi, TX

加我微信吧

카카오톡 나를 추가!아이디: czx9court

@Czx9court

http://www.linkedin.com/in/courtsmithczx9