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The decisions of the central banks have spread optimism to the market

Despite The negative outlook for economic growth seems that will come to an end within 2024 as the decisions of the central banks have spread optimism to the market. The FED have kept the interest rate steady at 5.25%-5.5% for a third consecutive meeting last week but it also indicated three 25bps cuts until the end of 2024. On the other side of the Atlantic, ECB and BoE have voted to keep the interest rates unchanged once again (at 4.5% and 5.25% respectively), implying that there will be no more increases, and if the fiscal data improves there is even a possibility for cuts within 2024.

The rising interest rates of the last two years have dampened the outlook for economic growth and is the main reason that global oil demand growth has slowed considerably in the fourth quarter of 2023, according to the International Energy Agency (IEA). The IEA projects that demand growth will be lower than previously anticipated, reaching almost 400,000 barrels a day less in the final quarter of the year. This brings the estimated annual global demand for 2023 to 101.7 million barrels per day. However, the IEA also noted that strong supply from non-OPEC+ countries, including record production from the United States and rising output from Guyana, will be more than enough to meet the projected demand growth for 2024. The IEA expects non-OPEC+ supply growth to reach 1.2 million barrels per day in 2024, which is significantly higher than the 1.1 million barrels per day forecast for demand growth. This surplus supply is due to a combination of factors, including the end of the post-COVID rebound in consumption and the continued expansion of production from non-OPEC+ countries.

Asia is projected to be the primary driver of global oil demand growth in 2024, with robust economic growth propelling South Asian demand beyond that of China, where economic headwinds could hinder demand for the fossil fuel. Amidst Asia's insatiable appetite for jet fuel, demand for refined products like gasoline is also anticipated to remain strong. The region might experience refinery runs in the first quarter of 2024 reaching an unprecedented level. South Asian demand is projected to surge by 3.2% in 2024, surpassing mainland China's 2.9%. China has been the most significant catalyst for global oil demand growth over the past few decades, accounting for 40% of the incremental demand and over 50% so far this decade. India has played a less prominent role, but in the future, India is expected to be the single most important region driving demand growth over the next 20 years, making it a crucial country to watch for future demand trends. Despite Chinese and Indian refiners’ appetite for Russian crude, the market will be keenly observing Venezuelan crude flows to both Asian buyers following the removal of sanctions.

At the 28th UN Climate Change Conference, world leaders reached an agreement on a final text for the global stocktake. The text outlined plans to "transition away" from fossil fuels and work "toward the phasedown" of unabated coal. Nations have pledged to actively participate in the shift away from fossil fuels in energy systems, aiming for a just, orderly, and equitable transition. In this crucial decade, they are accelerating efforts to achieve net-zero emissions by 2050 in alignment with scientific recommendations. Additionally, leaders have committed to tripling global renewable generation capacity and doubling energy efficiency improvements by 2030 to expedite the transition to sustainable energy. The concluding text also highlighted the expectation that global greenhouse gas emissions will likely peak between 2020 and, at the latest, before 2025, recognizing variations in timeframes for different countries. Objections from crude oil producers such as Iraq, Kuwait, and Saudi Arabia were raised against language emphasizing a phaseout or phasedown of fossil fuels. However, the term "transitioning away" was deemed acceptable as it broadened the responsibility to all of society rather than solely focusing on producers. The ultimate agreement granted countries flexibility to establish their own transition pathways "in a nationally determined manner."

Sale and Purchase:

On dry S&P activity, the Newcastlemax sector, the Scrubber fitted “Beks Brown” - 206K/2005 Imabari was sold for USD 16.5 mills to Chinese buyers. The Kamsarmax “Presinge Trader” - 81K/2016 Jiangsu New Hantong (Electronic M/E) was sold for high USD 25 mills to Greek buyers, while the “Ultra Tiger” - 84K/2009 Sanoyas changed hands for low USD 16 mills. Chinese buyers acquired the Panamax “Glory Amsterdam” - 77K/2006 Oshima for USD 11.5 mills. On the Ultramax sector, the “CP Guangzhou”- 64K/2015 Chengxi was sold for USD 23 mills to Chinese buyers, while the Scrubber fitted “Unity Endeavour”- 62K/2014 NACKS changed hands for USD 23 mills basis TC attached at 110.5% BSI58 till May 2024 - September 2024. On the Supramax sector, the “Supra Oniki”- 57K/2010 Qingshan found new owners for USD 10.8 mills. Last but not least, the Ice Class 1C Handysize “Clipper Copenhagen” - 38K/2010 Jiangsu Eastern was sold for excess USD 11 mills to clients of Armator Shipping.

On wet S&P activity, the Aframax “Aegean Power” - 116K/2007 Samsung changed hands for USD 42mills to undisclosed buyers. The MR2 “Ocios Ioannis” - 47K/2009 HMD was sold for USD 25.5 mills, while the Ice Class 1A “SCF Angara” - 51K/2008 STX changed hands for USD 25 mills. On the MR1 sector, Turkish buyers acquired the Ice Class 1A “Blue Trader” - 37K/2005 HMD for USD 17.8 mills, while the one-year older “Rundemanen” - 35K/2004 Kitanihon was sold for USD 20 mills to Chinese buyers. Finally, the Small tanker “Hz Singapura” - 14K/2022 Ningde Shengfan found new owners for USD 21.5 mills.

Xclusiv Shipbrokers Inc.