A slow start to Monday (09/11) morning was pleasantly interrupted in the early afternoon with Pfizer’s announcement of a 90% efficacy Covid-19 vaccine. This small light at the end of the tunnel sent markets roaring with Oil prices making the first significant up move in a hot minute… This announcement brought some much-needed optimism, that the market has for so long been striving for; laying the first bricks on a pathway that will hopefully lead to the world we all knew a year ago. This optimism and thoughts of a ‘normal’ world and normal life, has seen petroleum-based markets rise as they felt wanted again on the back of new demand optimism. These effects not only rubbed off on tanker stocks but also tanker freight rates, with clean routes seeing the most activity on hopes of returns to travel and tourism, with the main narrative being an increased demand for jet fuel. (Reuters)
Shortly after the announcement on Monday (09/11) TC2 saw Jan21 firm from where it opened at 8.20$/mt jumping to 8.60$/mt after the announcement. TC5 Cal21 saw a similar trend gapping higher to trade nearly a 1$ above marks at 20.50$/mt a few times into the afternoon. Dirty routes also saw some hope with further dated TD3C 2H up at 8.75$/mt and Cal21 8.10$/mt, TD20 Dec was up from the end of last week trading consistently at 50, driven by the fuel oil price climb. (ICE)
This trend continued into Tuesday (10/11) morning where the front of the curves on TC2 and TC5 saw Balmo trading higher at ws78 and ws76 respectively. TC2 continued to strengthen throughout the curve with Dec climbing 9pts from marks to open at 95 and Q1(21) climbing $0.40 from Monday’s session trading 14.60$/mt. TC6 Q1(21) firmed 0.50$ to trade 9.00$/mt and TC14 Dec jumped 5pts from marks trading at 74. (ICE)
It’s refreshing to see the market moving like this; recent phrases like ‘dropped by x amount’ ‘slapped’ ‘how much lower can this go…’ have all been a common occurrence, but this week saw language that brings hope to the curve across all routes. Owners will be hoping these jumps can be sustained, with the market on a general climb from here as most routes curves strengthen throughout. Each new news broadcast, that brings hope and confidence to the world on a return to normal life, also brings the same sentiment to the tanker market, if these upwards moves in rates can be seen into the new year it would provide a nice end to such a roller-coaster of a year in the market.