JP Morgan: Tanker boom will weaken in 2017

The boom for VLCCs, very large crude carrier vessels, will not last, writes JP Morgan in a new analysis and projects significantly lower rates for the tankers, starting in 2017 and two years forward.

Photo: Euronav

The high rates for the VLCC vessels will not last. They will most likely fall significantly starting in 2017, projects JP Morgan in a new analysis.

Even though the largest crude oil tankers reached USD 100,000 a day for periods in the fourth quarter, the tanker shares have declined on the stock exchange in the past few months and, at this point in time, it is a good idea for investors to trim activities in tanker carriers with high exposure in the spot market for crude oil, notes JP Morgan. Instead, focus should be on companies in product tanker or carriers with high coverage in charter contracts.

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