/biz/ - Business & Finance

>>19188329
It's not Brandon he's trying to use logic.

>>19188501

>Oil demand is rebounding and OPEC is reducing output. Oil demand will soon outpace supply, which in turn taps into the maxed out reserves. Since reserves are full, it will take forever to get it down to appropriate levels.

This is true, but the demand for Oil is a demand for oil exports i.e. Tanker demand unless you see tankers as a purely storage play. If the short term demand for tankers drops off due to oil being drawn from storage only and only being used domestically, which is entirely unrealistic (but we'll concede it for the sake of argument), then the old age of fleets + IMO2020 and IMO2030 regulations will cause the upkeep of older ships to be not worth their upkeep and required upgrades, as demand and spot rates drop, and so these ships will be scrapped causing supply-side destruction.

>Since storage will no longer be needed for awhile, it will reduce demand for tankies.

Only applicable for the Contango gamblers, but I'm an tanker investor. However, the Contango issue gave tankers a great cash buffer and great deleveraging going into a balance sheet recession; ie debt deflation, piles of debt growing bigger, liquidity from FED not useful as cashflow is king when paying down debt is the major issue the recession revolves around

My argument is that Tankers exist in a nice catch-22 whereby when demand for tankers go down, a fail safe kicks in that destroys supply. It's a win-win situation if played with a macro time frame. There are NO SHIPS on the order book for tankers right now due to known and unknown upcoming environmental regulations (You don't want to build a ship for it to be obsolete in half it's lifespan), and as well shipyards have closed down and creditors have left the space. And if Oil demand goes up, tanker demand goes up for exports. But even in this situation 25% and likely more of VLCC tonnage is headed for the scrap yard in 2021, with even more in 2022.

>>19065831
>>19067953

The asteroid that'll wipe out the oil bulls has been crossing the ocean all this time. Maxed out cushing will devastate them, this will wipe them out.