TankerTrackers User Manual

By TankerTrackers.com

2017-01-16

Thank you for tuning in to TankerTrackers! We hope the information we provide will be useful for you as we

have plans to add more content as we go along. This document is a description guide of our website and shall

be updated whenever changes are made. Here’s what we currently offer:

FLOATING STORAGES

A lot of hydrocarbons are stored aboard idle tankers that just float in place for a number of reasons. It could be

because of temporary lack of demand, emergency reserves or a play on contango; where the oil is stored until

the price is higher. In the case below we have Iran. Whenever there is draw in storage (drop in barrels), they

tend to deny having a floating storage because it seems unfavorable given that they export this oil to their

customers overseas while trying to keep oil production up. However, whenever the barrel count rises, they

tend to pride in that because it is a healthy sign of their production. In our case, we had 38.5 million barrels on

October 31st

, 2016 and it fell to 21.2 million by January 9th

, 2017; a drop of 17.3 million barrels, or 243,000

barrels per day. This implies that Iran is likely short of its production target by that much or taking advantage of

the current (higher) barrel price in order to rake in extra revenue as the OPEC agreement of November 2016

has no restrictions on exports, but on production. In the particular case of Iran, the qualification method we

adhere to when adding new tankers into the floating storage fleet is to first wait a full month (of presence in

Iran) before adding them as the original purpose of their fleet is to export the cargo, and not store it.

CORPORATE FLEETS

For those of you who own shares in certain incorporated tanker fleets, TankerTrackers publishes a daily barrel

count for each fleet with its fixed number of tankers. Some fleets such as FRONTLINE move and store a lot of

crude oil as they operate a great deal of VLCC’s (Very Large Crude Carrier; >2 million barrel supertanker) while

other fleets like Teekay Tankers shuttle a lot of refined product such as gasoline aboard smaller tankers. Here’s

some things to keep an eye on; the occupancy percentage of total capacity, highlighted in yellow. It shows how

full the fleet is. Most tankers travel full in one direction and return empty for more. If you notice that a fleet is

half full, it means that it’s out delivering without any issues. If the fleet shows more than half, then there is a

chance that certain tankers have either ended up in a traffic jam at some anchorage or are temporarily serving

as floating storages for the purpose of contango. And finally, if the fleet shows a number lower than half, then

it is indicative of very high demand and little access to supply.

SINGLE TANKER (CASE STUDY)

As of January 2017, we have launched a new research project that would track single tankers as case studies.

The objectives are to learn how long it takes for a tanker to travel between point A and point B, as well as study

what happens along the way, in case of partial pickups/deliveries. It gives us a great reference we can always

return to in case of any forecasts need to be made. For example, it takes roughly 45 days for a Saudi tanker to

bring oil into a US EIA inventory report. If a decision is made before/during/after an OPEC meeting, we’ll know

what their intentions were 45 days later.

HOT SPOTS (PORTS & ANCHORAGES OF INTEREST)

To make best sense of the various ports of interest around the world, we decided that the best way to figure

out demand without actual delivery tracking (we lack the time and financial resources as this is a pro-bono

hobby) is to divide each hot spot into two; the port & the anchorage outside the port. An anchorage is where

tankers are ordered to wait for their turn to sail into port. Sometimes they wait very briefly, other times they

can wait for many months. Even though a port might look barren, there could be a large number of tankers in

anchorage, and vice versa. However, the anchorage is always within the country’s maritime borders, meaning

that the customs agent has already included the tanker’s oil cargo into the national inventory numbers. Some

countries might want to wait until the tanker actually unloads at port, but in the case of the United States of

America, the US Customs adds the cargo to the EIA inventory report once approved for crossing the border into

the anchorage. We encourage you to review both the anchorage as well as the port to get an idea also of which

direction the oil is going.

Example: Houston PORT vs Houston ANCHORAGE during December 2016, when a lengthy fog forced the ports

to shut down vessel traffic during the final week, thus causing the anchorage outside Galveston Bay to swell in

number of tankers and barrels.

EIA REPORTS (WEDNESDAYS)

To help avoid random guesses, we look back at the history of declared changes in crude oil, gasoline and

distillate stocks in the USA. These are officially reported across the board by the EIA (Energy Information

Agency) on Wednesdays at 10:30am EST. TankerTrackers does not keep track of the reports issued by the API

(American Petroleum Institute) as those figures are reported voluntarily by the 500 petroleum companies

which make up its membership. EIA is a government agency which takes note of all companies that contain

more than 1,000 barrels in storage within US borders. We at TankerTrackers have compiled a historical log of

stated changes in EIA inventory of every metric they report. If we overlap 2 years of data, we get an average

that plays well with seasonality, in particular with the consumption of gasoline as well as distillates (diesel, jet

fuel, etc). You can see what times of year there are draws and when there are builds. We also hint what the

coming EIA report might look like, based on what the result was a year (51 weeks, actually) ago. This is by no

means a guideline, but a clue. There are however things that can derail those figures, and it tends to be

weather related, such as in the documented case of Houston. Please see “The Side-Effects Of Traffic

Disruptions In Houston.pdf” in http://TankerTrackers.com/papers

GOV STATS (OFFICIAL GOVERNMENT/JODI FIGURES)

Each month, many governments across the world state their hydrocarbon statistics. Some divulge great detail

which helps us calculate what exactly goes into storage each month/year. We look for data on domestic

production, imports, exports and consumption. From there, we’re able to make our calculations. In addition to

which, the importers (and even exporters) state how much money was spent/accumulated in the trade of oil.

From there we can calculate the price of the barrel for each country’s imports/exports. Take for example

Russia: During 2016, they exported it at an average price of $36/barrel whereas China spent $41.28, which is

nearly $19 lower than their domestic production breakeven price of $60. This means that as long as they have

the capital to do so, they will keep purchasing more oil to populate their Strategic Petroleum Reserves (SPR).

The GOV STATS section is updated throughout the month. We keep track of several countries, but they all

update at varying dates, often Russia being the earliest and India being last, with China and Japan in-between.

We do our utmost to be the first to report these figures, and provide a broader story rather than just how

many barrels were imported. Often times, a bigger picture reveals long-term intent.

Thank you,

TankerTrackers.com #OOTT

2017-01-16