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Bulls, bears and believing in fairies

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27 January 2016

Andy Pierce

TradeWinds

Bulls, bears and the need to believe in fairies were all thrown into the tanker market equation today as experts debated the future course of earnings at the Dorchester hotel in London.

Henry Curra, head of global research at Braemar ACM, told Marine Money Forum that confidence had been dented following a fall in earnings in the early days of 2016.

Curra presented views ranging from bear to bull and even mega-bull before coming down on the positive side of the scale.

"We found the easiest conclusion to come to is the bear conclusion," he said. "It's an inevitable facet of being an analyst in a market like this that when you are in a strong position you tend to be bearish and revert to historical averages.

"We are probably going to argue that this market has legs. We believe that a lot of the tonnage coming into the market is delayed to the back end of the year. The distillate storage will soak up a lot of the newbuildings coming into the fleet and I think we have underestimated demand growth for tankers."

While declining to put a number on where the market will be this year, he said: "We are remaining bullish against a lack of confidence in the market.

"I think we still have an upbeat story, certainly for a year, possibly even two years and possibly beyond that."

Paddy Rodgers, the chief executive of Euronav, said that if demand figures follow the path predicted by agencies, the orderbook for this year could be blown away.

However, he said owners had to keep their faith in the market.

"The core rule is that owners have to believe it. It's like Peter Pan, do I believe in fairies," he quipped.

Nikolai Kolesnikov, chief financial officer of SCF (Sovcomflot), joked that being from Russia people may expect him to be a bear. However, his outlook is positive.

He said: "All in all, for crude and product tankers, we are bullish for the next two to two and half years."

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