*Libya’s return to greatness*
At the end of last week, news broke out that Libya has signed a countrywide ceasefire. The UN-backed this deal overseeing the signing of an agreement for two rival groups to sign the cease-fire on October 23rd. This end to major conflict within the country along with the lifting of the Force de Majure a few weeks back can only provide beneficial to the Libyan oil industry. This is clear as Libya is now already producing around 500k bpd, with a 700k bpd estimate by the end of this year. This cease-fire will allow 2 key ports, Ras Lanuf and Es Sider to re-open. All of this is good news for tanker markets, driving the demand for tankers in the Mediterranean which is so desperately needed. The increased production should result in increased exports, helping to rebalance the market dynamics of a heavily over-supplied tanker segment. W-O-W (20th-27th) TC6 spot values have seen a 12% increase from ws70 to ws78.44. With November paper contracts climbing 4pts from ws90 to ws94 on Friday (23/10/20) firming again on Monday (26/10/20) opening ws96 then ws98. Hopefully, this Libyan news continues to provide bullish to TC6 as Libya continues to increase its exports. (Oilprice, S&P Global)
*Tanker troubles close to home*
An average British Sunday afternoon became interrupted with news broadcasts announcing an LR1 tanker off the coast of the Isle of Wight had been potentially hijacked. The Greek-owned, Liberian flagged Nave Andromeda failed to reach port in Southampton that morning and vessel tracking data showed sporadic movements while underway just off the coast. As the story developed, it was confirmed 7 stowaways from the loading port of Lagos Nigeria had been found and caused a commotion on board. Luckily a few hours later the Royal Navy had successfully removed the stowaways (potential asylum seekers) from the tanker, preventing a potential hijacking, ecological disaster or any serious injury to the crew. (Tradewinds)
*What way will the U.S. tip*
* Which way will the US flip?
With the U.S. election less than a week away, the result could be pivotal for the tanker market. On the surface, Trump is good for oil and Biden bad.
Morgan Stanley believes a Trump win would be better for U.S. crude exporters, with U.S. exports going hand in hand with tanker freight rates, providing a lift to the market. However, a Democratic win could see an easing on the Venezuelan sanctions which could see more ships available as they are removed from the blacklist, which should theoretically help the market as it re-opens more trade routes. In reality, this would just release a large number of vessels to the already over-supplied market.
A push for reduced gasoline usage and higher consumption of greener fuels under Biden would see a reduction in domestic usage, which if production levels stay the same and foreign demand is high, could put gasoline exports in high demand from the U.S. boosting routes like TC14 to Europe.
Only time will tell and with all politicians, it would be safest to hedge your bets and take everything they say with a pinch of salt. (Freight Waves)