The global outlook for crude oil is strong in 2017, but refined oil product stocks need to be drawn down to increase product tanker demand, Braemar ACM Shipbroking’s Global Head of Research Henry Curra said.

Global demand for crude oil will rise by 1.4 million b/d before bottoming out in 2020, he said, as a panel speaker at the Connecticut Maritime Association conference. Refining demand has slowed, however, due to abundant stockpiles of refined products, he added.

“In 2016, refinery runs barely moved at all,” said Curra, a result of stocks that had built up in the preceding two years, leading to less demand for product tankers.

“Over the last few months, we’ve been in a process of drawing down those stocks and as we draw down those stocks they compete with imports and that’s given a slightly bearish tinge to that product carrier market,” he said.

Meanwhile, a big flow of Atlantic Basin crudes were seen moving to Asia, especially in light of the current Brent/WTI spread, he added.

Source: Platts