Tanker Market, Three month overview

Knotty seems to be the tanker market, since there is a controversy between market data and investor’s attitude.

Upward trend appear to show imports of crude oil in China, according to China’s National Bureau of Statistics while on the other side of the Pacific, EIA (Energy Information Agency) and DOE (Department of Energy) expect U.S. to produce more oil in 2013 as drilling activities remain high, which means that more domestic oil will be used from U.S. refiners hence the reduced imports, negative for tankers operators.

Full Size Image, Here

Full Size Image, Here

Moreover, positive route follow the Baltic Tanker Clean Index (BCIY) and Baltic Tanker Dirty Index (BDIY).

Full Size Image, Here

According to Intermodal’s Weekly Report (Week 3),  prices for 5 yrs old tanker vessels moved up, for VLCC’s 11,3%, for Suezmaxes 8.1%, for Aframaxes 8.8%, for LR1 3.2% and for MR’s 5.2% since Dec-13.

In the same way went the scrapping activity which was caused from the depressed shipping rates, as a result in tighter supply and demand balance. While increasing in scrapping activity means weakness in shipping rates, in that case, not only shipping rates rise but investors acknowledge opportunities in the market where tanker stocks had benefited from the rally.

Brief look in tanker stocks, (01/11/2013 as benchmark - 24/01/2014) we can detect the positive trend lines in almost all the stocks:

CPLP, Full Size Image, Here

EURN, Full Size Image, Here

NAT, Full Size Image, Here

FRO, Full Size Image, Here

TNK, Full Size Image, Here

NEWL, Full Size Image, Here

VLCCF, Full Size Image, Here

TNP, Full Size Image, Here

Lastly, significant was the announcement from EIA (Energy Information Agency) from Washington D.C., “China, India and OECD Europe to import at least 65% of their oil and 35% of their natural gas by 2020 and becoming more like Japan, which relies on imports for more than 95% of its oil and gas consumption.”

CG Finance Blog contributor Petros Mpantavis has no position in any stocks mentioned. CG Finance Blog has no position in any of the stocks mentioned.

Petros Mpantavis 

Shipping Finance Enthusiast 
Shipping, Trade and Transport Student
University of the Aegean

peter.badavis@gmail.com

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