Benjamin Nolan, an equity analyst at USinvestment bank Stifel, attributes the rally to a seasonal uptick in demand forcrude.
In a weekly client briefing theresearcher noted day rates have flattened to around $40,900, which is still nearly four times higher than the year-to-date average of $12,235.
In addition, he noted suezmaxes are seeingdaily levels around $13,600, a figure that represents a weekly increase ofalmost 30%.
“We believe structural factors whichimpacted the dry bulk market are now taking effect in the crude tanker market,”the researcher continued.
“VLCC rates have broached the slowsteaming threshold above which shippers are motivated to speed up ships as opposedto conserving fuel, thus introducing as much as 10% to 15% incremental demandand creating a ceiling for rates.
“Also, because VLCC rates were nearlyfour time suezmax rates despite only twice the capacity, shippers have begun tosplit cargoes effectively dampening demand for VLCCs and increasing demand forsuezmaxes.”
On Friday, a day in which VLCCs were seeing dailylevels as high as $50,000, researchers at Gibson warned clients that the pre-winterrally will offer only “temporary relief” to owners even it has been muchstronger than in years past.
“While crude tanker owners are hoping rates willremain strong throughout the winter period, the underlying problem ofoversupply is still ever present,” they said.
“The current trading VLCC fleet stands at around 600vessels. But with an expected four more scheduled to be delivered this year,and a further 58 set for delivery from the start of 2014 onwards, defaulttrading conditions are going to remain challenging.”