Ms. Boyden: That depends on which sector you are talking about. With tankers, yes, things are pretty bad. There is really not a lot of promising signs of recovery out there. The OPEC cut is still causing a lot of problems with the decline in supply. In fact, they cut production by about 4.2 million barrels last November. Kuwait recently announced it doesn't expect OPEC to further cut in this month, but at this level things aren't great.
The other problem is, there continues to be high levels of inventory, which is definitely causing a problem. The US clearly stands at about 337 million barrels and the SPR is at about 99% of capacity. Also about 30 to 35 VLCCs are being used as floating storage, which is around 70 million barrels. Finally I think we can look at oil demand growth has been seriously impacted by the global recession. The IEA does expect oil demand to fall about 1.6% to about 84.5 million barrels a day, and that would be about the lowest level it's been in about five years. The last thing would be the order book, which so far year-to-date about 414 vessels have been delivered to the fleet about 35.2 million tons. Over the last eight months, the fleet is growing about 7%. If you combine all those things on the demand side with the supply side, it's really not a big surprise, but we see rates on the majority of subsectors being at breakeven or below. Quite frankly, we would expect that to stay that way for a little while.
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