Fearnley Fonds has cut its tanker rate forecasts amid fears any fourth quarter rally will be muted.

Rikard Vabo.

Analysts Rikard Vabo and Lars Erich Nilsen also tip share prices in the sector to remain under pressure due to a lack of indicators suggesting a short-term improvement in earnings.



In a note to clients they said: “A seasonal upswing is expected, however there are several factors which suggests any upswing may be fairly muted, and it will take some time to absorb the current overhang of tonnage.”



Vabo and Nilsen believe VLCC spot rates will average $27,500 daily in the fourth quarter, with suezmaxes and aframaxes picking up $20,000 and $15,000 per day respectively.



For 2011 the analysts forecast the same vessels will earn $37,500, $29,500 and $19,000 per day respectively.



They added: “There are few positive indicators of any rate improvement in the short term, hence shares could continue to be under pressure given current rate levels.



“However, we tend to believe seasonally stronger demand and potential for floating storage and other more extraordinary factors (normal in tanker segment) should trigger rates upwards within the next months.”