Although product tanker freight rates remain in positive territory, shipowners should be cautious about newbuilding investments as there are still a number of ships to be delivered, according to Italian broker Banchero Costa.

Freight rates have been at a five-year high, driven by low crude oil prices, while also supported by the relatively limited fleet growth.

Long-range 2 (LR2) tankers on the Gulf-Asia Pacific route averaged US$25,793/day in the first quarter of 2015, compared with US$4,916/day in the same period last year.

The earnings for medium-range (MR) tankers on the South Korea-Singapore route averaged US$11,715/day in the first three months of 2015, compared with US$3,267/day in the same period in 2014. One-year period rates for LR2s hit US$22,000/day, a significant increase from US$16,000/day a year ago.

"The fundamentals on the demand side remain good as the low oil prices and the increasing refining capacity in the Middle East and the Far East have encouraged trade," said Costa. "The opening up of these new refineries is expected to increase demand for larger product tankers to transport the refined products into the major consuming markets such as Europe."

On the fleet side, oversupply remains an issue, although the last few years have seen much fewer deliveries. In 2014, the fleet expanded by 3%, up on the 2% increase in 2013 and 2012.

However, this year deliveries in the region of 13.3 million dwt are forecast, leading to a 7% fleet growth.

In the first three months of the year, 15 vessels totalling 1.1 million dwt were ordered as a result of the strong market performance. Secondhand ship sales have also picked up.

The orderbook as a proportion of the total product tanker fleet is now at 15.4%.