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Erik.Ranheim@intertanko.com Manager Research and Projects The Dynamic Tanker Market Tokyo 10 November 2004

Erik.Ranheim@intertanko.com Manager Research and Projects The Dynamic Tanker Market Tokyo 10 November 2004 . VLCC price and freight rate . m $. ‘000 $. Historic market – why? . R ecord demand - unforeseen Commodity squeeze -T ight oil supply - record consumption

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Erik.Ranheim@intertanko.com Manager Research and Projects The Dynamic Tanker Market Tokyo 10 November 2004

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  1. Erik.Ranheim@intertanko.com Manager Research and Projects The Dynamic Tanker Market Tokyo 10 November 2004

  2. VLCC price and freight rate m $ ‘000 $

  3. Historic market – why? • Record demand - unforeseen • Commodity squeeze -Tight oil supply - record consumption • Oil production > consumption 2 and 3Q04 - high price and production • Low stocks, or do we know? • Persian Gulf long haul export up + 2.6 mbd • Fleet increasing - but less than demand? • Phase out of SH • Phase in of DH • Moderate sales for decommissioning before 2010 • Restricted shipyard capacity

  4. Average monthly tanker spot rate and Middle East oil production mbd $ per day $ per day VL- AG East Middle East oil prod

  5. Oil price and freight rates – real and nominal $52 WS 200

  6. Middle East oil production • mbd • +2 mbd means+ 44/77 VLCCs E/W

  7. Crude oil seaborne trade - Indices

  8. Demand growth areas

  9. World oil demand growth by region • mbd • Source: IEA

  10. Chinese oil production and demand mbd

  11. US crude oil import mbd Production mbd Source: EIA/DOE

  12. US product oil import Source: EIA/DOE

  13. US total stocks - barrels m bbls

  14. European crude oil import(up 2.7%) Source: OECD

  15. European oil product import Source: OECD

  16. Japanese crude import mbd

  17. Japanese products imports mbd

  18. World oil demand outlook- EIA mbd

  19. World oil demand outlook- IEA mbd

  20. World oil supply outlook- IEA mbd

  21. FSU crude oil and products export • mbd Other export: 0.5 mbd, Sakhalin/North

  22. Tanker supply

  23. Tanker Fleet Development 92-04 M dwt Number Source: Clarkson

  24. Tanker phase out - m dwt

  25. Phase out 5-29,999 dwt- no. 3.5 m dwt 2.4 m dwt

  26. Phase out Aframaxes Number

  27. VLCC phase out - number • Subject to administrations • ** LOOP, lightering areas exempted

  28. Tanker renewal - fleet by hull ?

  29. Tanker trade by hull 2003 – 960 m ts % SH average 40%

  30. VLCC trade 1H04 - 494 m dwt(960 m dwt 2003) m dwt Source. Fearnleys

  31. VLCC trade 1H04 - 494 m dwt (960 m dwt 2003) Source. Fearnleys

  32. Sales for decommissioning • m dwt

  33. Tanker fleet development m dwt

  34. Shipyards activity Japan S Korea m cgt m cgt Source: MSR

  35. VLCC price development Mil Yen Mil USD Mil Won Mil USD Dec 91: Max 13,860 m Yen/Dec 91 $110 m April 95: Min 7,064 m Yen/Sep 02 $62.5 m Nov04 :11,108 m Yen/ $105m Steelprice:

  36. Conclusion

  37. Gasoline price at the pump

  38. Conclusion • Demand -continue to increase - slower pace • High deliveries – stronger fleet increase • Modern fleet • Moderate phase out/sales for decommissioning • Yard capacity increasing • Newbuilding prices declining

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