Concern is growing about the swelling MR orderbook. Recent large orders have included 16 MRs for Middle Eastern interests for long term charter to Shell taking MR orders this year to 180 compared to 115 last year and only 50 in 2011 according to London broker EA Gibson.

Other orders are still under negotiation as well as options under existing contracts. These take the current orderbook to over 300 MR vessels.

It is a similar story in the LR2 sector where this year's 60 orders represent 74% of the current LR2 orderbook.

The fear is that over-ordering could once again kill, if not exactly the golden goose, one of the more promising sectors of the tanker market.
After some flattish years, the volume of products carriage has doubled in 20 years. From winter last year to mid-2013 earnings have been the best since pre-crisis days in 2008 albeit from a low base. Since then earnings have fallen away to current MR averages of around $10,000 a day. However the forward demand story is till a positive one.

With new refinery capacity coming on stream in the Middle East, India and China, and refinery shutdowns in Australia, Europe, Japan and the US East Coast, demand is forecast to increase some 3% over the next few years with more long haul movements. The shale oil story may have been bad news for the crude market but it is good news for products with US exports now exceeding imports.

However there is a timing issue. Almost all these new MRs will deliver by 2016. The ships will be in the market before all the new refinery capacity is on stream and that is not accounting for any delays in refinery projects.

On the positive side is the fact that 14% of the MR fleet is over 15 years of age which means that scrapping could be high over the next few yea