Removes production cuts equal to 1 million barrels a day
According to Reuters, OPEC has reached an agreement, despite the disagreement that existed before the meeting, to reduce production cuts equivalent to one million barrels a day. This means an actual increase of 600.000 barrels from today’s production levels.
There is always some uncertainty about how much impact it will have on the tanker market, but it can surely only be interpreted positively.
An increased supply of 1 million barrels a day, according to Clarkson’s, could increase prices from $15.000 to $25.000 a day for the largest ships. Two million barrels can raise the rates to $40.000 according to the same company. We have already seen positive trends for the rates in recent weeks, and it will be exciting to follow the development ahead.
We expect to see a gradual increase in production and we believe this is the first step towards removing production cuts from 2016. The cuts have worked, the oil price has stabilized at a higher level, oil stocks have been reduced, and it is now time for the oil companies to acquire market shares again.
In other words; The future in the tanker market looks significantly brighter than it has for long!