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146 comments on DrumBeat: December 14, 2008

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doug fir on December 14, 2008 - 6:27pm Permalink | Subthread | Parent | Comments top

Glad you brought up the Baltic Dry Index. Yesterday's comments included link's to Financial Sense and M. Simmons. Where Matt and Jim give the impression that there is no glut of empty ships, that every tanker is full. So what is it, Lots of full ships, or low Baltic dry, I mishear, or something in between-that the index doesn't include oil tankers?

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Ravenscroft on December 14, 2008 - 6:43pm Permalink | Subthread | Parent | Comments top

The Baltic Dry Index measures the prices for ships that carry dry goods so it has nothing to do with oil tankers. I believe the major item carried by "dry" ships is iron ore, steel and grains. The iron ore and steel markets have been hit hard by the economic crisis.

Worldwide oil demand is down 2-4% so tankers are being paid less but there are not an implosion in prices like there is for the dry ships.

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doug fir on December 14, 2008 - 7:27pm Permalink | Subthread | Parent | Comments top

Thanks.

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PhilRelig on December 14, 2008 - 7:35pm Permalink | Subthread | Parent | Comments top

Come to think of it, oil is indeed a wet good, not a dry one! :)

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PhilRelig on December 14, 2008 - 7:40pm Permalink | Subthread | Parent | Comments top

What about coal, though? Is coal technically considered a "dry good"? (It is, after all, dry!)

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WNC Observer on December 14, 2008 - 8:03pm Permalink | Subthread | Parent | Comments top

I am wondering if the letter of credit problem is as much of an issue with the oil tankers as it is with the dry bulk shippers? My impression is that a lot of the tanker fleet is owned by the IOCs, is it not?

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Cid Yama on December 14, 2008 - 8:16pm Permalink | Subthread | Parent | Comments top

Right now there is a very high demand for tankers for storage.

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Undertow on December 15, 2008 - 8:21am Permalink | Subthread | Parent | Comments top

According to Simmons, that's the rumour. The actual fact (according to his discussions with the tanker industry he says) is that four tankers have been booked as future storage but are not being used for that purpose yet.

Only the pirates are currently storing oil in VCCs according to Simmons.

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146 comments on DrumBeat: December 14, 2008

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