Tanker operator Euronav believes that although lower bunker costs make speed less of a cost issue, owners will continue to operate at low speeds. "[They will] not wish to waste fuel and so speeds in ballast will vary as to whether the ship is sailing to a cargo or not. No shipowner will want to speed up just to wait,"the company said in a statement to the press when announcing its quarterly results. "Ships should continue in slow speed until they are fixed for a cargo and then adjust speed to arrive just in time. Ships are not speeding up to a degree which will make a tangible difference to capacity. The industry has learnt over the past five years how to manage variable voyage costs and speed is the key factor."
The operator also predicts steady market trade for its fleet in the short and medium term spurred by oil demand. "Demand for oil is healthy and growing. We believe the fall in the oil price will stimulate demand further in the short and medium term." The company maintains that the oil price contango (where those hedging on future prices are willing to pay more than the expected price of the commodity in the future) will continue to drive floating storage and reduce vessel supply for transport throughout 2015.
Euronav's bottom line is expected to be aided by the fact that vessel supplies are limited as the financial crisis reduced productivity at yards - but the company anticipates a shift in trade patterns. "Ton miles are structurally increasing. The Atlantic is effectively long oil – this oil supply is feeding demand from non OECD and especially in Asia and the Far East. Therefore traditional trade lanes will continue to be replaced by longer haul routes with the Far East as their ultimate destination."
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