Sometimes people in the military talk about '
the facts on the ground'. When it comes to oil
demand I always tell people to look to the people involved in delivering oil. The people that are getting oil to the people who have already bought it. That'll give you the '
facts on the ground'.
Look at the oil shippers. FRO. SFL. GMR. Their profits rise and fall,
not with the price of oil. But with the
demand for oil. With the shippers - it's all about the spot rate. There are two ways a shipper makes money. Leased charters, and the spot rate. Basically, a leased vehicle is a ship that has a contract on it for a specific amount of time, and a specific amount of money. But the spot rate is the fluctuating rate for using a ship. The premium getting charged for getting the oil to consumers, right at the moment.
And lately - the spot rate has been steadily increasing. FRO's price hasn't been rising because of the price of oil has been increasing. It's been increasing because they're making more cash because the spot rate and the demand is increasing.
That's the facts on the ground.
