FIS: Tanker Market Overview
MRs in the West continue to be very choppy, with rates being very reactive to a slight change in tonnage or demand.
TC2 saw spot returning to ws230 (22/08) down from circa ws362 on the 8th of August – a reduction of 120ws points in two weeks. In the USG, TC14 spot was assessed at ws157.5 on 22/08, down from ws370 levels seen on 5th August. As a result, the Baltic MR Basket TCE came off from circa $38k to $25k a day.
More trading has been seen in the front months on TC6 paper - with rates now returning to sub ws300 (ws269 on 22/08), still not printing less than ws200 since January of this year.
After a dip on TC17 to ws280s in the spot market, we have seen this improve back to circa ws350.
This volatility in the physical market has translated to an uptick in trading on the CPP paper, with an improvement of 587 lots.
TD3C is continuing to look positive with the highest spot rate since early 2020 printing last Thursday, ws80.95 - providing owners with a reported round trip TCE of circa $41K according to the Baltic. After a quiet start to the year on the DPP paper, this rise in rates provided many with the opportunity to take profit from positions entered early in the year, and as a result, we have seen large volumes of Cal 23, Cal 24 and even Cal 25 trading on TD3C.
DPP Tanker paper volumes increase by 10,909 lots week-on-week.
Technical view of the Tanker Market:
September Futures - The futures traded straight through the USD 13.312 high and our potential upside target of USD 15.197; this forced the RSI to new highs, meaning the negative divergence has failed.
We do not have intraday data to create precise Elliott wave counts, but this new high would suggest the futures are actually on an extended wave-3 and not a wave-5, as previously thought.
Technically bullish with price above all key moving averages supported by the RSI above 50.
Downside moves that hold at or above will support a bull argument; below this level, the technical will have a neutral bias. Based on the momentum indicators making new highs, downside moves should be considered countertrends.
Resistance levels are now At USD 16.2210, USD 17.3646, and USD 18.8962.
Written by Alex Macarthur and Edward Hutton, Edited by Mopani Mkandawire (https://freightinvestorservices.com/fis-live/).
