It was quite a day for shareholders of Frontline Tankers. Their stock shot up nearly 29% on news of increased VLCC and Suezmax tanker day rates.
In a note dated 15 March by Wells Fargo Securities Senior Analyst, Michael Webber, VLCC and Suezmax spot day rates have jumped 87% and 82% respectively ($32,500/day and $37,700/day) from previous levels.
Microsupply/demand disruptions (and potentially elevated longhaul Chinese imports (West Africa) stemming from Iranian supply concerns) have driven VLCC and Suezmax rates to profitable levels, with the timing coming against the grain in terms of seasonality (and the general theme of tanker overcapacity).
According to our channels, the physical tanker market is still seeing upward pressure in the Atlantic Basic intraday, with relatively thin supply (VLCCs, Suezmaxes), which could continue putting some near term upward pressure on day rates and potentially tanker stocks. The Mediterranean market is also firming to a degree, which could keep some Suezmax vessels from ballasting to the Atlantic, which could keep tonnage (vessel supply) relatively constrained, potentially adding some modest length (days most likely) to the recent rally in rates.
In his statement, Mr. Webber makes a point by saying that Wells Fargo does not, however, feel this upward momentum is the start of an industry-wide recovery. In addition, much of the profit gained by Frontline Tankers’ upswing will be handed over to Ship Finance International (SFL), as part of Frontline’s December 2011 restructuring agreement.
Overseas Shipholding Group (NYSE:OSG) was up 8.39% at the bell on Friday.
ROME (Reuters) – An Italian judge on Friday cleared three migrant sea rescue charities that had been accused of abetting irregular immigration in complicity with human traffickers, throwing out a case opened...
(Bloomberg) — The closure of one of the East Coast’s busiest ports after the collapse of Baltimore’s Francis Scott Key Bridge has so far not led to broad price increases,...
(Bloomberg) — An Iranian ship that’s been linked to Houthi attacks in the Red Sea is returning home, removing a prominent asset in the area as the Islamic Republic braces...
April 18, 2024
Total Views: 1495
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.