24JUN2019 - NEWS - IMO 2020: Fundamentals to Rule Product Tanker Market Soon - GIBSON

The turmoil in the shipping and fuel markets from the IMO rule is bound to settle down, sooner, rather than later. This will allow for the fundamentals to take over again and determine the future course of the freight rate market. In its latest weekly note, shipbroker Gibson said that “as we noted in our report dated 7th June, the slowing global economy, partly driven by the ongoing US-China trade war is starting to impact on world oil demand. An increasing number of agencies are factoring in an increased risk of an economic downturn into their projections. In May, the OECD lowered its forecast for global economic growth to 3.2%, whilst the Netherlands Bureau of Economic Policy Analysis recently claimed that world trade had fallen back to its slowest growth rate since the financial crisis. Fitch Ratings Agency was even more bearish, trimming its 2020 growth rate to 2.7% owing to persistently weak Chinese consumer spending and the impact of the US-China trade war. The Agency has warned that growth could be as low as 2.4% if President Trump follows through on his threat to place tariffs on a further $300 billion of Chinese imports, further undermining trade growth. America is not immune either; the New York Federal Reserve’s gauge of business growth in New York State posted a record fall this month to its weakest level in more than 2.5 years, suggesting an abrupt contraction in regional activity. As a result of these headwinds, the IEA has again revised down its assessment for world oil demand, which is now estimated to grow by 1.2 mbd in 2019, with further downside expected if the US-China trade war escalates”.

Published by Editor - www.Livebunkers.com at 24-Jun-2019 07:18:46 [UTC] , contact editor at editor@livebunkers.com