(1) After the scale of offshore floating warehouses declined, the freight rate gradually decreased. At the time of writing, the freight dropped to 1 USD 10,000/day, and then it began to bottom out.
(2) The total number of people infected with epidemic diseases in the world has reached 28.93 million. Due to the unfavorable control of foreign epidemic situation, the global demand for crude oil continues to decline. Even in the case of China's large-scale expansion of crude oil imports, it is still difficult to support the demand for crude oil, which has also led to a sharp decline in the demand for crude oil transportation.
(3) After the demand for oil storage drops, it enters the traditional oil transportation off-season market.
Under the influence of the above three points, two questions are raised about the problems faced by oil transportation:
(1) Should the demand for oil storage be restarted when the demand for crude oil is low?
(b) China's offshore crude oil imports continued to increase substantially year-on-year, which affected the oil transportation price?
1.It was mentioned in the logical combing of the oil transportation situation in July that if the number of confirmed cases exceeds 20 million at an extremely fast speed, the global demand for crude oil will further decline and the floating oil storage is expected to restart.
After the global crude oil production entered the increase cycle in August, the US crude oil inventories once again exceeded expectations in the first week of September.
In September, Saudi Arabia began to significantly reduce the price of light crude oil.
That is to say, if OPEC+doesn't hold a lightening meeting after crude oil enters the period of increasing production, it will soon enter a period of continuous decline in crude oil prices and restart the demand for oil storage under the situation that the current foreign epidemic situation is out of control. However, because increasing production is a process of increasing month by month, there will be no rapid decline of crude oil caused by Saudi Arabia's sudden and substantial increase in production at the beginning of the year, which means that the decline of crude oil price is a slow decline process, so the demand for oil storage is also a slow growth process.
2. China crude oil import data by sea are as follows.
In the case of China's offshore crude oil import reaching a record high, the offshore crude oil import rose sharply in May, but the whole VLCC transportation price continued to fall after April 2 1. Thus, the decisive factor that actually determines the price of oil transportation is not the demand growth in China. China's demand for crude oil is only an important part of the global demand for crude oil, but it cannot be used as a decisive influence. It can even be said that the increasing demand for crude oil in China has further digested the scale of offshore oil storage.
Summary: Based on the above factors, I personally think that the VLCC freight rate at this time has been lower than the break-even line of $25,000/day, and it has reached 1000/day, and there is a demand for bottoming out in the future. September next year is the traditional peak season for oil transportation. Due to the continuous decline of global crude oil demand and the increase of superimposed supply, the demand for oil storage may be activated, but this is a slow process, and the stock prices of the two ships have reached the valuation limit.
At the same time, I would like to make a suggestion here. The two-ship business belongs to the traditional industry, and at the same time it is in an extremely winning situation. In the long-term tracking of 10 months, the stock price performance of the two ships can be said to be tasteless. Unfortunately, the oil transportation industry is an industry that destroys value. If you want to get excess returns in the stock market, I want to stay away from them, but if you are a band trader, you will trade with the idea of band trading for a long time.
All the above are personal opinions and do not involve investment advice. The stock market is risky, so be careful when entering the market!