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I have always believed in a version of the trickle-down theory, at least in tracking markets, by starting at the top to follow a Reader’s Digest summary of global growth and trade down to transportation, utilization and earnings. All indicators will never totally agree, but they give an overall view of what’s happening, although with the standard stock broker’s disclaimer  "historical and current performance is not necessarily an indication or guarantee of future performance".

Nobody in business likes uncertainty. That is not reality. The reality is that uncertainty is the only thing that is certain. The known knowns break down periodically and bring periods of upheaval that appear to break all the old rules considered concrete even a short time ago.

What is coming down the pipe in 2017 and 2018? As of this week, I am more clueless than normal, but see 2017 to be a volatile and uncertain period. Once again, most sectors of the maritime industry face declines in trade, demand and freight / day rates. Overcapacity will still be with us - whether it be in tugs & barges, offshore supply / support vessels or container ships, as we are almost daily reminded. 2016 was a chaotic year, especially in the second half.

Recent months’ MGO activity has resembled a rollercoaster ride with all the ups and downs seen in all regions that we report on. When looking at the most recent months, July decreased across the board from June’s ending prices, but then by end of August, all regions were back up. Interestingly enough, despite the volatility seen, we have edged very close to where prices were one year ago end August, with three areas within 5% of last year’s prices.

Every day we hear news of more cuts in E&P budgets, leading to more charter terminations for rigs and offshore service vessels. Oil & Gas com-panies, both private and government controlled, slashed projects around the world during 2015 and 2016 with everyone running for cover as oil prices slid from over $100/BBL to less than $30/BBL.

It is again time to take a look at the past and wonder about the future. Six and a half years have passed since June 2009, the official end of the latest Great Recession. The global recovery has been slow and erratic, and economies are still fragile.

The pressure is certainly building and it appears only a matter of time before it reaches a level of critical mass. The offshore industry is about eight months into a prolonged downturn after Saudi Arabia unilaterally decided to keep the oil spigot open in the hope of gaining market share. This combined with strong output from US shale and Canadian sands has led to a glut of crude across the globe leaving oil prices languishing.

It’s all about the price of oil. In our last September 2014 tank barge market report we were just beginning to see the drop begin in earnest. At that time oil prices were running about US $80/BBL for West Texas Intermediate Crude. Since then some pain and suffering has really taken hold on the market. At the end of February (after a brief rally) WTI crude prices were hovering around US $50/BBL.

It has been five and a half years since the official ending of the Great Recession caused by the subprime mortgage crisis and collapse of the housing bubble. While that recession is officially over, the recovery has been unbalanced, slow, uneven, uncertain, and has earned many more adjectives than can be printed here. Most of us still feel its effects.

As the brewers Guinness like to occasionally remind us, "good things come to those who wait". Well that’s just about the sum of the sentiment listening to some US deepwater offshore vessel operators.

2014 is off to a good start for most sectors Marcon covers, and although it remains a bit of mixed bag we are confident that the year will finish strong - which we have all been looking forward to.

It has been 23 years since the Oil Pollution Act of 1990 became law. The sunset date is December 31, 2014, at which time all single hull tank vessels and barges in the United States will be phased out of petroleum service.

The US Gulf oil patch is very much back at work and things have not looked this promising since the pre-Macondo days, with prospects set to continue in a positive direction with vessels working and little availability. In the next 18 months the US Gulf is set to see nearly 20 rigs return for drilling programs.

The offshore oilfield, in its historic cyclical fashion, is improving again after a significant downturn in 2008-2010 caused by the financial collapse and BP/Macondo spill. We are not back to the days of 2007/2008, but at least things are headed in the right direction.

It is said that if your lucky element is Water and you did well in 2012 - the Year of the Dragon - then your luck will most likely continue during the Year of the Snake (small dragon). Even forgetting the Zodiac, the majority of companies surviving 2008  2012 will most likely survive the challenges of 2013 - but not all.



Featured Vessels

Ro/Ro Ship (GS07000)

Supply Boat (SU18163)

Supply Boat (SU23356)

Double Hull Tanker - Product (TA02580)

Tank Barge - Ocean (TB45000)

Tug - Azimuthing (TG51011)

Jack-up Barge (MB20011)

Azimuthing - Tug (TG40077)

Push Boat (TP13057)

Research Vessel (RV09030)

Buoy Tender (MC18138)

Tug - Twin Screw (TG41001)

Supply Boat (SU15035)

Tug - Twin Screw (TG24072)

Deck Barge - Ocean (DB23665)

Jack-Up Barge (MB20612)

Deck Barge - Ocean (DB31080)

Tug - Twin Screw (TG34076)

Supply Boat - AHTS (SU18240)

Deck Barge - Ocean (DB34376)

Tug - Twin Screw (TG43106)

Tug - Twin Screw (TG30198)

Hover Barge (MB21082)

Double Hull Tug - Azimuthing (TG45084)

More Featured Vessels

Marcon International, Inc. P.O.Box 1170, 9 NW Front Street, Coupeville, WA 98239 USA
Phone:360-678-8880 | Fax: 360-678-8890 | email info@marcon.com
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