Baltic Dirty Tanker Index on the Decline



Baltic Dirty Tanker Index

The Baltic Dirty Tanker Index is followed by analysts and money managers in order to assess the revenue and earnings potential of the crude oil shipping industry. How the Baltic Dirty Tanker Index performs, especially its year-over-year growth, is one factor that has significant implications for companies such as DHT Holdings Inc. (DHT), Frontline Ltd. (FRO), Teekay Tankers Ltd. (TNK), and Nordic American Tanker Ltd. (NAT).  The PowerShares DB Oil Fund (DBO) is an industry ETF that tracks the performance of crude oil.

On a year-to-date basis, the Baltic Dirty Tanker Index declined 13.1% to 769 on March 20, 2015. On a year-over-year basis, the index recorded an 8.2% increase.

Article continues below advertisement

Going forward

Based on fourth quarter performance and the current market scenario, tanker market fundamentals are expected to be positive. Euronav (EURN) noted in its recent market outlook that there has been “a robust and sustained recovery in freight rates in both VLCC and Suezmax sectors during the fourth quarter of 2014 – a feature which has continued and expanded into Q1 2015.”

MIDF Investment Research, a research house providing clients with informed views and actionable ideas on economic indicators, markets, and companies in Malaysia, expects the Baltic Dirty Tanker Index to trend higher due to continued weakness in crude oil prices. This will encourage seaborne trade activity.


More From Market Realist