Global economic gloom to sink tanker market recovery hopes
SINGAPORE/LONDON (Reuters) - The crude oil tanker market's hopes for a recovery next year could run aground as global economic turmoil stifles oil demand in the United States and Europe, denting prospects for a sector already battling a supply glut and a rate rout.
Strong global oil demand, driven mainly by China, has been the lone bright spot in the depressed dirty tanker market this year, although earnings for ship owners still slipped to record lows this month as supply of new ships outpaces demand growth.
An economic slowdown, or worse yet a recession, could push oil consumption in the United States -- the world's top oil consumer -- into an irreversible decline and overshadow China's growing needs for the energy resource.
"The crude tanker markets have been really bad so far in 2011, but the bad news is that it can get worse," said Peter Sand, chief shipping analyst with ship association BIMCO.
"Supply is not stalling the way demand is, in particular for crude tankers."
Graphic on the crude oil tanker supply:
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