Key Takeaway
OPEC’s strategic move to increase production from 9.7 million bpd to 10-11 million bpd in April led oil price to plummet. With the oil demand already hit by COVID-19, the glut soared to historically high levels leading the forward curve into contango. This confluence of events drove the demand for dirty tankers to all-time highs.
The recent rally in tankers stocks reflects the imbalances mentioned above. Yet, imbalances are not sustainable by default. As such, I believe that a cyclical correction is imminent on the back of a challenging tanker market. The key