With the world awash in oil and prices half their year-ago levels, there's one market that's benefited: crude tanker ships.
In the first half of 2015, shipping rates for the some of the largest tankers transporting oil to Asia peaked at just above $90,000 a day, as countries like China stockpiled cheap crude. Tankers also became a means of floating storage, as some energy companies and traders stored their supplies in hopes of locking in on higher future prices from a market in contango, where the futures price is higher than the spot price.
But by August, tanker rates, which tend to be very volatile, had plunged about 70 percent, as demand dried up ahead of refinery maintenance season. The industry benchmark, the Baltic Exchange Dirty Tanker Index, is now down more than 25 percent for the year.
Still, analysts insist this sector is poised for its most profitable fourth quarter in years.
"We do think that the tanker market is going to see more upside as we move into Q4 of this year," said Christian Wetherbee, a senior transportation analyst at Citi Research. "We see stronger demand from a heating oil perspective and in terms of overall energy consumption. And we would expect, from a supply perspective, not a lot of incremental deliveries to the existing fleets."