Gas Price Rally Could Trigger More Demand for Tankers

The rise of gas prices could act as a catalyst for oil demand and thus more cargo for oil tankers, should more countries opt for oil-based supplies for their winter needs, Hellenic Shipping News Worldwide reported. A cold winter could also play its part. In its latest weekly report, shipbroker Gibson said that “the current strength in gas prices is having major ramifications for global energy markets. Record prices in Europe and Asia are forcing utility firms to look for alternative energy sources and have pushed some companies into bankruptcy. Many have been forced to burn more coal despite the environmental consequences, whilst oil-based fuels will also receive a demand boost in regions where oil fired power capacity still exists. With oil demand expected to find some support, could tankers finally receive the catalyst they have been longing for?”According to Gibson, “the answer to this question depends on the scale of the demand increase, which Goldman Sachs estimates could equate to a near 1% uptick in global oil consumption. However, this would depend on a ‘cold winter’ and would also likely be focused east of Suez, where oil-based fuels have greater potential to form part of the power generation market. High sulphur fuel oil (HSFO) is expected to be the primary beneficiary of the oil-based fuels. Countries including Pakistan and Bangladesh, as well as some Middle Eastern players, have already been more active in the spot HSFO market as LNG prices began to rise in Q2.” Read more.