FIS: Tanker Market Overview
Trans-Atlantic activity continued to recover, with TC2 spot firming 16.65%, from 200ws to 233.33ws.
TC14 firmed by 16.83%, jumping from 163.33ws to 190.83ws.
MR Atlantic TCE basket September assessment closed the week at $32,216/day, up from the $30,173/day close in the week ending 2 September.
TC2 October FFA mirrored gains in the spot market, as 270ws became 290ws by Friday.
The TC14 Balmo contract hit ws212 on Friday, up 25ws from Friday’s Baltic Spot Index assessment and further highlighting owners’ reasons to smile.
LR1s strengthened, too. The TC5 spot market moved from 310.71ws to 332.14ws.
TC5 Oct FFA firmed from 280ws to 295ws over the course of the week.
After a slow start to the week in the VLCC market, a flurry of activity pushed the TD3C spot index back up to around 80ws. It began the week slipping to three-week lows of 73.40ws.
According to Tankers International, a scramble for VLCC cargoes in the midweek saw eight VLCCs fixed on Wednesday, of which two were fixed above $50,000 b/d. Another three were fixed on Thursday.
About half of Guyana’s oil exports have reportedly headed to Europe in 2022 to replace Russian crude. The Suezmax market has seen the biggest boost. Guyana’s oil exports going to Europe have increased from 16% last year to 49% so far in 2022.
The TD20 spot market was relatively stagnant around the 126.5ws mark in the week.
Paper contracts became softer. Q4 contracts opened the week trading up from 128.5ws to 144ws, and Cal23 up from $15.20/mt to $15.75/mt.
USGC Aframax rebounded a touch in the spot market after the US Labor Day holiday, rising from 206.07ws on Monday 210.71ws at the end of the week.
DPP FFA volumes were down by 1,546 lots to 7,437 lots.
CPP FFA volumes swelled by 286 lots to 4,229 lots - an impressive feat given the US holiday.
Technical view of the Tanker Market:
October futures – Technically bullish last week, the futures looked to have entered a countertrend wave 4 with key support at USD 13.2580.
The futures traded to a low of USD 14.0220 before trading to new highs, indicating we are now on wave 5 for this cycle phase.
The new high has created a negative divergence with the RSI. However, based on our wave analysis using William’s approach, we have a potential upside target of USD 17.6954. Above this level, we have further resistance at USD 18.6940 and USD 19,9660.
Downside moves at or above USD 14.8717 will support a bull argument. Below this level, the futures will have a neutral bias. Only below 14.0220 is the daily technical bearish.
Technically bullish, if we look at the weekly Elliott wave cycle, we look to be on a bullish wave 3, suggesting this current wave 5 is only part of a larger bull cycle.
Written by Alex Macarthur and Edward Hutton, Edited by Mopani Mkandawire (https://freightinvestorservices.com/fis-live/).
