July 6th, 2000 22:00 GMT
Published in WEEKLY
Saudi Arabia’s move to pump out an extra half million barrels of oil per day is going to add even more heat to an already hot tanker market, according to market watcher Riaz Khan.
Khan’s detailed monitoring of tanker movements around the Middle East Gulf and Red Sea area suggests that July could prove a record month for fixtures.
The month opened on a high note. “It is unprecedented that we should have such a high number of 108 fixtures. This should bode well for owners,” said Khan.
But he has a piece of advice for owners, saying they should not panic if there is a lull in fixing during the month.
Khan, who operates through Geneva-based Marinav Shipping and Trading, was predicting around 120 fixtures for July before the Saudis made their move.
Now it is anyone’s guess what might happen.
“Will these additonal barrels also be absorbed by the East, or will US companies step up to the plate?” Khan asked. “If suppliers were to release their August nominations early and charterers do the same, activity in July for August laycan could heat up even further.”
Elsewhere, London broker Clarksons has come up with an interesting set of figures concerning the changing structure of the Capesize market.
Big Capesizes of more than 160,000 dwt now account for the bulk of the sector, at 47% of the fleet, compared with only 20% back in 1985.
Moreover, Clarksons says the bigger ships are scooping up more long-term business, leaving the uncertainty of short-term business to the smaller units. It is these ships that will find themselves most exposed to a downturn in the market.