The global oil market may now be at its most critical point of the entire downturn, and JPMorgan analyst Noah Parquette believes that tanker investors should re-think their strategy headed into 2016.

Despite VLCC rates near $100,000, tanker stocks mostly traded sideways throughout Q4. Parquette sees this action as an indication to rotate from companies with exposure to crude prices and into companies with product tanker exposure.

“While we expect 2016 rates to remain relatively strong, we are significantly lowering our 2017-19 rate assumptions for crude tankers due to our new view on the supply/demand balance as 1) vessel deliveries accelerate, 2) demand growth slows (global crude production), 3) crude inventory drawdown occurs, and 4) vessel efficiency improves,” Parquette explained.

JPMorgan downgraded…

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