Oil Tanker Economics and the Strong Dollar's Impact

[00:00:00] A strong dollar in reinforced oil reserves have an impact on the oil market. Archie Smith is here

[00:00:05] with all the information you need to stay up to date. Freight rates showed a trend reversal last

[00:00:10] week. We'll keep you up to date with all the latest market activity. All this and more on FreightUp.

[00:00:15] Freight up!

[00:00:19] Hello and welcome to FreightUp. My name is Renanda, and I'll be your host as we navigate the seas of

[00:00:24] freight and commodities. So this week's episode is been quite eventful in the crude market. It's really been coming off. There's a lot of downward pressure on the Brent futures at the minute, or well, you know, all of the benchmarks really. I'd say the kind of the first thing to address is, you know, since the beginning of last month,

[00:01:41] the backdrop has very much been the Gaza conflict.

[00:01:44] All throughout October, our market it's kind of bounced back up to around 8120. At the time I left my desk. And that's for the Jan 24 Brent crude future which is the front

[00:03:01] month future in the Brent so yeah you're listening, just come ask him questions, he'll be there. Just pop us a review on Apple Podcasts or Spotify wherever you get your podcasts

[00:04:21] and I'll send you my address, it's perfect.

[00:04:24] Good exchange there.

[00:04:26] What else is going on in the world of oil? point five stuff which is the very low sulfur. There's no clear answer but kind of market chatter is that Chinese refineries are producing less of it so obviously more from the physical side and again that's really pushing the time spreads as well. I mean you know the deck Jan which is the front spread at the minute that's trading up like two dollars today you know even higher on the week so we're just seeing a lot of buying in front spreads and front cracks.

[00:05:43] Yeah. You know sometimes it's even harder to have boosted that 0.5 futures and swaps market substantially. High sulfur is slightly different. To mention anything on the high sulfur would be probably the high sulfur east west that has rallied 18 bucks on the week. Just over a week ago it was

[00:07:01] trading flats and when the high sulfur east west is trading flat that means that the SING 380

[00:08:04] in the front it's actually gone contango which is where the future becomes more expensive than the spot. So I mean it's only for some of the front months we're seeing them and it's only in small

[00:08:10] amounts but we are seeing you know Jan trading 25 to 50 cents higher than Dec and so on and so

[00:08:19] forth down to about mid 2024. Well RG I think the back of a strong T-aid fixture. Friday is where we had our first really bullish day as the first trade saw November paid at 15,250 which is a plus 250 range,

[00:09:40] which was then quickly paid at 15,500 while. Q1 slipped to 8,300 and Cal24 traded down to a low of 10,500. Fast forward to this Tuesday, the 7th of November, and November and December managed to push up to 11,500 and 10,600max remained range bound as November and December traded within a range of 150. This trend continued on to Friday, up until Monday, where good bidding activity bright, deep in the heart of Texas? I heard about it. I definitely have heard about this. I'm glad that you'd heard about it because I think that has a thing or two to deal with what you're going to talk about today.

[00:13:41] It does not.

[00:13:42] It does indeed.

[00:13:43] It does indeed.

[00:13:44] FIS, including our CEO, John B, such as their fuel consumption or efficiency, whether they are scrubbed or non scrubbed. Nevertheless, the trends that the research concludes does give us a bit of

[00:15:00] an insight into what is happening in this market at the moment.

[00:15:03] What has been happening, Luke?

[00:15:05] Right.

[00:15:05] Yeah.

[00:15:05] So what we've been looking at this week is basically we've observed two of the This has now settled down to nearly 20% as fuel has cooled somewhat from their highs and freight rates have rocketed. So freight rates today are 126% higher than they were at the start of 2021, but fuel rates are only up 53%. There is a similar trend in TD25 with the percentage having been 40% in early 2021 before

[00:16:23] dropping to today's level of below 20%.

[00:17:27] So Andrew, can you tell us a bit more about your background and kind of what sparked your curiosity in data and the economy? I began my career working for a by-side research firm called Williams Inference Service.

[00:17:34] And Jim Williams was definitely a fringe thinker and observer of markets, but service was to those who took it. an analyst for Dr. Ben Galad. And Ben is the president of the Academy of Competitive Intelligence. He specializes in war games. And I was Ben's analyst for several war games, including some for global integrated oil companies, as well as others that through work in, in

[00:19:02] Central America and the like.

[00:20:05] you've kind of been inspecting in kind of forming your picture of what next year is going to look like. The first observation price is where things are

[00:20:12] today. It is the description of the push and pull between bulls and bears in the

[00:20:19] marketplace today and how I'm going to contextualize what I'm going to say is techie about the Technical analysis what we have here is a cup and Handle and the handle is a bull flag pattern to me Right here right now Even though we might test next week for 20 or for 16 come down from 435

[00:21:41] I think that there is a bull run on the back end of this

[00:21:46] to either hit or come close to from 435 will probably again, as I said before, retest 420 ish. And I'm saying that's an ish. We might get a it shows yields as people have been looking at the big brother TLT. I look at TBT just because what you really wanna track

[00:24:24] is the yield and how are the yields reacting.

[00:24:26] And TBT shows that very clearly.