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Week 13: West African VLCC Market Strengthens

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Week 13: West African VLCC Market Strengthens PART 1 OF 4

Tanker Index Falls, Crude Tanker Stocks Rise in Week 13

BDTI

The BDTI (Baltic Dirty Tanker Index) tracks shipping rates for crude oil tankers on representative routes. Researchers and analysts follow the index to assess companies’ revenue and earnings potentials. In week 13, which ended March 31, 2017, the BDTI fell from 804 to 790, declining some every day of the week.

Tanker Index Falls, Crude Tanker Stocks Rise in Week 13

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Since the crude oil tanker business is seasonal, it’s important to look at its year-over-year performance. In week 13, the index was lower than the previous year’s level. On average, the index was 3.0% lower than the same period last year.

Stock performances

Frontline (FRO) and Euronav (EURN) traded in negative territory in week 13. All the other crude oil tanker stocks traded in positive territory. Below are the stock returns of crude oil tanker companies in the week ending March 31, 2017, compared to the previous week.

  • Teekay Tankers (TNK): rose 2.0%
  • Gener8 Maritime (GNRT): rose 6.6%
  • Tsakos Energy Navigation (TNP): rose 1.3%
  • Nordic American Tankers (NAT): rose 3.1%
  • Frontline (FRO): fell 1.1%
  • Euronav (EURN): fell 1.3%

Shipping companies account for 19.7% of the Guggenheim Shipping ETF (SEA). SEA rose 1.0% during week 13. If you’re interested in a broad exposure to the industrials sector, you can invest in the SPDR Dow Jones Industrial Average ETF (DIA).

What’s next in this series?

In the next part of this series, we’ll see how crude oil tanker rates fared in week 13. After that, we’ll take a look at the cost side of the tanker industry—bunker fuel prices. Finally, we’ll see if any analysts have changed their recommendations or target prices for crude oil tanker companies and look at consensus recommendations.

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