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The Eye in the Sky - Freight Rate Effects of Tanker Supply

Regli, F. and Nomikos, N. ORCID: 0000-0003-1621-2991 (2019). The Eye in the Sky - Freight Rate Effects of Tanker Supply. Transportation Research Part E: Logistics and Transportation Review, 125, pp. 402-424. doi: 10.1016/j.tre.2019.03.015

Abstract

We show how the evolution of crude oil tanker freight rates depends on the employment status and geographical position of the fleet of very large crude oil carriers (VLCCs). We provide a novel measure of short-term capacity in the voyage charter market which is a proxy for the percentage of vessels available for orders. We find that our capacity measure explains parts of the freight rate evolution at weekly horizons, where traditional supply measures are uninformative. The fact that freight rates directly influence shipowners’ profitability and charterers’ expenditures makes our measure particularly relevant for these groups of market participants.

Publication Type: Article
Additional Information: © Elsevier 2019. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Publisher Keywords: AIS, Crude Oil, Forward Freight Agreements, Freight Rates, Tanker Markets, VLCC
Subjects: H Social Sciences > HD Industries. Land use. Labor
Departments: Cass Business School > Finance
URI: http://openaccess.city.ac.uk/id/eprint/21895
[img] Text - Accepted Version
This document is not freely accessible until 2 April 2020 due to copyright restrictions.
Available under License Creative Commons Attribution Non-commercial No Derivatives.

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