The World's Largest Shipping Company Is Already Preparing For The Next Oil Crash

[krafty]

It was almost a year ago, when having tumbled in early 2015, oil proceeded to rebound strongly into the summer, where it traded at about $60 for three months, before US production resumed resulting in the next big leg lower which culminated with this's February drop to 13 year lows. At that point a comparable rebound to last year materialized, and just like last year, the pundits have emerged claiming that there will be no further downside. Incidentally, we covered this comparison previously in "For Oil 2016 Is Setting Up To Be A Rerun Of Last Year."

Maersk is perhaps best known for its pragmatic, even downright bearish outlook on the global economy. Recall that three months ago, the company admitted in its annual report that "demand for transportation of goods was significantly lower than expected, especially in the emerging markets as well as the Group’s key Europe trades, where the impact was further accelerated by de-stocking of the high inventory levels."

The company's CEO, Nils Andersen, told the FT in February that "it is worse than in 2008. The oil price is as low as its lowest point in 2008-09 and has stayed there for a long time and doesn’t look like going up soon. Freight rates are lower. The external conditions are much worse but we are better prepared."

It is the risk that the current 60% rebound in oil prices from 2016 lows is just another temporary bounce, that has forced Maersk to start preparing for the next oil crash. The company's CEO is confident that since the world keeps producing more petroleum than it can consume, it is "adapting its cost base to prepare for the risk of lower crude prices" according to Bloomberg.

http://www.bloomberg.com/news/artic...orce-maersk-to-plan-deeper-cost-cuts-ceo-says

 

[tanwahtiu]

indeed goods are still the same goods except the size and weight of goods has shrink, thanks to nano technology. Now 1 ship can take more nanotech goods these days and no need for bigger ships or more ships.

No need that many ships means less oil needed and therefore recession is here for a long time.

All thanks to nanotechnologies products and new lighter materials invented.

 

[tanwahtiu]

this is how nanotechnolgies will affect oil badly as size of goods shrink no need more oils.

indeed goods are still the same goods except the size and weight of goods has shrink, thanks to nano technology.

Now 1 ship can take more nanotech goods these days and no need for bigger ships or more ships.

No need that many ships means less oil needed and therefore recession is here for a long time.

All thanks to nanotechnologies products and new lighter materials invented.

 

[Gallego99]

Roubini said that the world has produced more goods than they can consumed. When guys like Roubini and Andersen speaks, better sit up and listen.

 

[frenchbriefs]

Roubini said that the world has produced more goods than they can consumed. When guys like Roubini and Andersen speaks, better sit up and listen.

no wonder the onyx karmen bluetooth speakers are selling for $130 on amazon instead of their usual $300 price tag.when will kfc be selling their chicken at $1 a piece?