Surge in Tanker Rates Unlikely to Continue

Asian clean and dirty tankers have just had one of their best first quarters in years as traders rushed to store oil products on the water as the COVID-19 pandemic slashed oil demand globally, but the boom in rates is not expected to continue beyond Q2.
Given the magnitude of the jump in rates in Q1, market participants said the uptrend was unsustainable and a significant correction was expected sometime in the current quarter, with the precise timing hinging on how the global pandemic pans out, S&P Global reported.
Dozens of very large crude carriers and Long Range 2 tankers are currently being deployed as floating storage for crude oil, gasoil, jet fuel, gasoline and other oil products, making spot tanker freight one of the best performing asset classes at a time when the prices of most commodities are at multiyear lows.
"Outbreak of the coronavirus has impaired major economies around the world and slowed down demand for oil products," BIMCO's Chief Shipping Analyst Peter Sand said. 
The Saudi-Russia crude price war is temporarily offsetting a slowdown in demand for dirty tankers, but this will only underpin the market for so long - and the outlook is not shaping up positively in the medium term, Copenhagen-based Sand said. On the contrary, the medium term outlook is gloomy, he added.
Echoing similar sentiment, Oslo-based senior analyst with Arctic Securities Ole-Rikard Hammer said: "The outlook is bullish for the short term for all tankers, but one needs to be cautious for the medium term."