Decoding the Fall in Crude Tanker Rates
Since the BDTI (Baltic Dirty Tanker Index) has fallen by 50% from the beginning of the year, crude tanker stock prices have also fallen.
China Had the 2nd-Highest Crude Oil Imports in August
August was the first time in 22 months that China has recorded a YoY increase in imports. Crude oil imports for China are now at a record high.
Analysts’ Recommendations for Crude Tanker Stocks
In Week 28, analysts made no target price revisions or recommendation changes for crude tanker companies.
Must-know: Why products supplied are increasing
For the week ending October 3, 2014, total products supplied were 19 million barrels per day (or bpd)—compared to 18.6 million bpd in the first week of September.
What Analysts Recommend for the Top Two Crude Tanker Stocks
DHT Holdings (DHT) was the best-performing stock among peers on a YTD basis.
Why current secondhand oil tanker values suggest a mixed outlook
While the VLCC data is positive, the picture for the crude tanker business remains mixed. This could portray a short-to-medium-term negative outlook.
Analysts Recommend a ‘Hold’ on Navios Maritime Midstream Partners
The consensus 12-month target price for Navios Maritime Partners is $4.83, which implies a potential upside of 40.82% from its market price on July 12.
EIA Crude Oil Inventory Report Supports Bearish Traders
The EIA reported that the US commercial crude oil inventory rose by 2.6 MMbbls (million barrels) to 487.4 MMbbls for the week ending December 25, 2015.
Credit Suisse Downgrades Navios Maritime Midstream Partners
Consensus recommendations On January 13, 2017, Credit Suisse downgraded Navios Maritime Midstream Partners (NAP) to “neutral” from “outperform” and decreased the target price to $12 from $13. Only five analysts give recommendations on Navios Maritime Partners. According to Reuters, the consensus rating for the stock is 2.6, which means a “hold.” One analyst has given a […]
Which Crude Tanker Companies Lost More in 3Q?
The third quarter wasn’t very good for tanker rates. In August 2016, the middle of the third quarter, tanker rates dropped to some of their lowest levels.
Time Charter Rates Fell at the End of November
The time charter rates for one year on VLCCs (very large crude carriers) fell to $43,000 per day on November 25—compared to $45,500 per day the previous week.
Euronav’s Financial and Liquidity Position after Its 3Q16 Results
On September 30, 2016, Euronav (EURN) had long-term debt of ~$1.0 billion. This increased from $952 million at the start of the year.
Why 5- and 10-year Very Large Crude Carrier prices are consistent
Five-year-old VLCC prices remained consistent, at $75 million, with the previous month’s levels. Year-over-year prices increased by 36%. Ten-year-old VLCC prices stood unchanged at $48 million and increased by 41.2% year-over-year.
Newbuild tanker prices rose, but you should still use caution
October’s increase is generally positive for the long-term prospects of tanker stocks like Frontline ltd. (FRO) or Nordic American Tanker Ltd. (NAT).
Week 44: Weekly Crude Tanker Industry Update
In week 44, many of the crude tanker stocks traded in the red. Only Frontline and Navios Maritime Midstream Partners traded in the green.
China’s Auto Sales Rise 8.8%: The Impact on Crude Oil Tankers
China’s (MCHI) auto sales for the first two months of 2017 were 8.8% higher than sales for the same period in 2016.
Record Oil at Sea: Crude Oil Prices Hit a 10-Week Low
The US benchmark WTI crude oil futures contracts for December delivery fell by 2.9% on November 11, 2015. Crude oil prices hit lows seen in August.
VLCC Prices Rose First Time in 2017
Newbuild VLCC (very large crude carrier) prices rose in May 2017, and this is the first time we’ve seen a rise in prices this year.
Gener8 Maritime Partners: Fourth-Best Performer in 2018
Gener8 Maritime Partners’ YTD returns were -10% as of April 5, 2018. Gener8 Maritime Partners is the fourth-best performer among its peers YTD.
Euronav’s Cash Return Policies to Shareholders
In September 2015, Euronav distributed an interim dividend of $0.62 per share. Euronav has stated that it is committed to distributing 80% of net income.
Why 15-year ship prices point to negative outlook for tanker stocks and earnings
Why ship prices (value) matter Ship prices (values) are often good indicators of financial health in the shipping industry. When shipping demand grows more than the supply of ships, shipping companies place additional orders of ships, which drives up purchase prices. Additionally, when firms are able to charge higher prices for transporting goods across the […]
On Deck with Crude Tankers: Positives and Negatives
Crude tanker stocks have given mixed returns in 2017. Gener8 Maritime has been the best performer YTD, while Nordic American has been the worst.
Analyzing DHT Holdings’ Performance in 2018
DHT Holdings’ (DHT) YTD returns were 1.1% as of April 5, 2018. DHT Holdings is the only crude tanker company with a positive YTD return.
Frontline Management’s Outlook for Tanker Rates
Even though industry tanker rates were strong compared to 1Q15, the company recorded negative growth of -7% in 2Q15 compared to 1Q15.
Week 9: Crude Tanker Industry Update
In week 9 of 2018, which ended on March 2, the BDTI rose from 646 to 669. In week 8, the index fell by three points.
Tsakos Energy Navigation: Fifth-Best Performer in 2018
Tsakos Energy Navigation’s (TNP) YTD returns were -12.8% as of April 5, 2018. Tsakos Energy Navigation is the fifth-best performer among its peers YTD.
Understanding China’s Rising Auto Sales in November 2016
China’s (FXI) auto sales rose to ~2.9 million in November 2016 from ~2.7 million in October.
Why high shipping capacity growth will continue to pressure tanker earnings
Update to Shipping capacity growth drops but outpaces demand, negative for tanker stocks The importance of capacity In a highly commoditized industry, like the shipping industry, capacity is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try […]
Will Fleet Growth Prove Negative for the Crude Tanker Industry?
In the first week of 2017, the number of VLCCs (very large crude carriers) in the world was 686. Halfway into 2017, the VLCC fleet has grown to 713.
Crude Oil Prices Rose Due to Geographical Tensions
The US benchmark WTI crude oil futures contracts for December delivery rose by 2.5% on November 16. Crude oil prices rose due to possible supply disruptions.
Must-know: Why the crude tanker orderbook is expanding
In order to assess the industry’s fundamental outlook, managers use the oil tanker orderbook. It’s an important yardstick. It includes the number of ships that have been ordered and the number of ships under construction. A rising orderbook usually suggests that oil tankers have a better expectation for future supply and demand dynamics.
Tankships seeks to expand its fleet size through acquisitions
Tankships seeks to expand its fleet size through timely and selective acquisitions of additional secondhand modern tankers and the available optional vessels.
VLCC Rates Rise by 127% Month-over-Month, BDTI Rises 15% YoY
VLCC rates (very large crude carrier) for the benchmark route Gulf to Japan rose from $49,400 per day last month to $112,100 per day for the week ending October 2, 2015.
Why Canadian crude exports to the US are on a high
According to the U.S. Energy Information Administration (or EIA), for the week ending September 12, 2014, U.S. crude oil imports from Canada hit a record high of 2.99 million barrels per day (or bpd). This was a 20% increase from the same period last year. Meanwhile, the four-week average on September 12 was 2.93 million bpd.
Outlook for global growth and tanker fleet for Teekay Tankers
Looking ahead to 2015, Teekay Tankers Ltd. (TNK) forecasts 2.0% net global tanker fleet growth with major contribution from the product tanker sector. There is a negative fleet growth estimate for the Suezmax and uncoated Aframax sectors.
Why the Baltic Dirty Tanker Index going south
Analysts and money managers follow the Baltic Dirty Tanker Index (or BDTI). They follow the Index to assess the crude oil shipping industry’s revenue and earnings potential. The Baltic Dirty Tanker Index decreased to 699 on August 29, 2014. It was 826 at the beginning of the month.
Weekly product tanker capacity growth rises, crude tanker falls
While annual capacity growth still remains above 3.5% for crude tankers and even higher for product tankers, it has come down since April, which is a positive sign.
Week 25: How Did the Crude Tanker Index Perform?
Since the beginning of 2018, the BDTI (Baltic Dirty Tanker Index) has fluctuated between 628 and 781. The year started out with the BDTI at 700.
Frontline has options, but they’ll likely put the company behind
There are several things Frontline can do to pay its maturing $190 million bonds. But activities such as selling assets or raising additional capital would likely put Frontline behind its peers.
Crude Tanker Stocks Fell in Week 29
The BDTI can be used to assess the crude tanker industry. In week 29 (week ending July 20), the BDTI fell from 744 to 723.
Crude Oil Prices Fell Due to the Appreciating US Dollar
December WTI crude oil futures contracts trading in NYMEX fell by 2.6% on November 17. Crude oil prices resumed a downward trend.
Key tanker stock drivers: China’s crude oil import volume
China’s crude oil import: The most important factor An indicator that has a first-degree (direct) influence on tanker rates is China’s crude oil import volume. When import volume rises, more tankers will be in use, which pushes up shipping rates. Conversely, lower import volume means an increased number of idled ships, which leads to increased […]
US Crude Takes Longest Route to Reach Destinations
According to preliminary weekly US data, total crude exports have averaged ~0.77 MMbpd in 2017—substantially higher than the same period last year.
Crude tanker index 25% lower, product tanker index steady
On August 30, the Baltic Dirty Tanker Index and Baltic Clean Tanker Index stood at 622 and 604, respectively.
Analysts See a 43% Potential Upside for Teekay Tankers
The consensus 12-month target price for Teekay Tankers is $1.69, which implies a potential upside of 43.2% from its July 11 market price.
Saudi Arabian Oil Production and Demand Increase
In June 2015, Saudi Arabian oil production hit a record high of 10.57 mbpd, the highest in the last three decades. In July, oil production fell to 10.36 mbpd, but it was still 4% higher than the same period last year.
How Does Tsakos’s Valuation Compare to Its Peers and Its Past?
Tsakos Energy Navigation’s enterprise value to earnings before interest, tax, depreciation, and amortization multiple is 4.7x as of February 18, 2016.
Frontline: What Do Analysts Expect in 1Q18?
The consensus 12-month target price for Frontline is $5.02, which implies a potential upside of 3.7% from the market price on April 19.
Key for Investors: Valuations as Indicators
In the shipping industry, valuations are generally higher in bad times—the profitability is lower. Similarly, valuations are lower in good times.
Why Teekay Tankers has high liquidity and leverage ratios
With TK evolving from a small player to global marine midstream service provider, the company has garnered significant advantages and a strong standing in the industry.
Euronav: Third-Best Performer among Crude Tanker Stocks
Euronav’s (EURN) YTD (year-to-date) returns were -9.2% as of April 5, 2018. Euronav is the third-best performer among its peers on a YTD basis.
How DHT Holdings Has Been Improving Its Leverage
DHT Holdings’ (DHT) debt has risen to $662 million as of the end of 4Q15 from $621 million recorded in 3Q15.
Fleet Updates for Euronav in 4Q16
Long-term contract On October 3, 2016, Euronav (EURN) signed a long-term time charter contract with Valero Energy. The contract is for seven years and will commence in 2018. To fulfill the contract, Euronav has ordered two Suezmax vessels. They will be delivered in early 2018, just before the contract commences. Delivery deferred Euronav’s two VLCCs […]
Must-know: Why the U.S. could hit a light crude oil refining wall
While U.S. oil imports have been falling over the last few years, tanker companies could benefit from a brighter outlook on U.S. oil imports in 2014.
Crude Oil Inventories Suggest Bear Market May Extend beyond 2016
The EIA projects that global crude oil inventories could slow down to 1.4 MMbpd in 4Q15, and then fall to an average of around 0.6 MMbpd.
Where Do Analysts See Frontline’s Earnings in Upcoming Quarters?
Analysts’ EBITDA (earnings before interest, tax, depreciation, and amortization) estimate for 2Q16 is $97 million, a 94% increase from $50 million in 2Q15.
Euronav: Recycling Is Encouraging for the Tanker Industry
Euronav (EURN) discussed the crude tanker industry in its 1Q18 conference call. Euronav talked about headwinds and constructive drivers.
Analysts Expect a Plunge in Frontline’s 3Q16 Revenues
Because crude tanker rates are generally strong in the fourth quarter, Wall Street analysts expect Frontline (FRO) to report a rise in revenue to $115.8 million in 4Q16.
U.S. oil production could slow in 2014, benefiting crude tankers
As oil production appears to be lagging oil rig count by two to three years, U.S. oil production growth could start to show signs of slowing in 2014. That could be positive for demand for crude tanker companies.
Investors Disappointed with NAT’s Results despite Strong Revenues
In this series, we’ll look at Nordic American Tankers’ (NAT) 4Q15 results, and we’ll analyze the factors that could affect the company’s revenue and costs in 1Q16. We’ll also analyze NAT’s fleet and its recent investments.
Newbuild prices record marginal change
Newbuild VLCC (very large crude carrier) prices for the month of November 2014 decreased to $97.7 million compared to $98.1 million in October 2014.
A review of Frontline and its fleet
Frontline Ltd. (FRO) is engaged mainly in the ownership or operation of oil tankers used to transport crude oil. It’s owned by Norwegian shipping magnate John Fredriksen.
Frontline comments on global shipping industry
Frontline recorded better vessel earnings compared to the second quarter. Improved fleet utilization was due to increased travel distance driven by crude moving from the Atlantic Basin to China.
Five-year and ten-year VLCC prices increase
With faster deliveries and employment of vessels, secondhand vessels tend to reflect industry participants’ expectations for medium-term fundamentals.
Baltic Dirty Tanker Index gains on rising Chinese imports
The Baltic Dirty Tanker Index interests analysts and money managers. They use it to assess the revenue and earnings potential of the crude oil shipping industry.
5-year-old and 10-year-old VLCC prices stay at consistent levels
Since secondhand vessels can be delivered within a few months, they tend to reflect industry participants’ expectations for medium-term fundamentals and rates, unlike newbuilds, for which two years of delivery time is mandatory.
Indicators for the boom and bust cycle of crude tankers
Like any other commoditized industry, the shipping industry is also very cyclical due to lengthy construction lead time.
Key tanker stock drivers: Baltic Dirty Tanker Index and Brent oil
Brent oil and the Baltic Dirty Tanker Index Commodity prices and shipping rates are like twins: when prices like oil are rising, they often reflect a faster increase in demand than supply—and higher demand often correlates with trade activity. As vessels like crude tankers can take up to five years to build, they also mean […]
DHT Holdings’ fleet portfolio and vessels under construction
Most of the vessels in DHT Holdings’ fleet portfolio were built in the year 2000 and onwards. The exception is one vessel that was built in 1999.
Current vessel prices rising
Depending on its size, a tanker takes two to three-plus years to build, with each tanker costing upward of ~$60 million.
US top oil producer; crude imports decline
The US has produced more oil than Saudi Arabia since the fourth quarter of 2012, and the country’s oil production surpassed Russia’s output in 2011.
5- and 10-year VLCC and Suezmax weekly prices on the run-up
Weekly vessel values have been on the rise, with positive week-over-week and significant year-over-year growth.
Navios Maritime Midstream Partners: Company overview, fleet
Since its listing on November 14, 2014, until January 16, 2015, Navios Maritime Midstream Partners recorded a 4.2% increase in its share price.
Navios Maritime Midstream may enter LPG market
The international LPG shipping market is volatile in profitability, charter rates, and vessel values, adversely affecting businesses during downturns.
Navios Maritime Midstream: Analyst targets, management comments
Angeliki Frangou, head of Navios Group, expects 2015 to be an uncertain period. Factors include anemic growth in Europe and deflationary fears in Japan.
Why did Nordic decide to raise capital instead of debt?
According to Nordic American Tanker Ltd. (NAT), the company will use the net proceeds from the follow-on offering to primarily finance the acquisition of two to four vessels.
Nordic American Tanker might buy 3 newer or 4 older vessels
According to Nordic American Tanker Ltd.’s (NAT) prospectus, the company will acquire two to four vessels from net proceeds on 10,000,000 share issuance, which is now raised to 12,000,000 shares.
Tanker Rates Exhibit a Counter-Seasonal Trend
For June, the Baltic Dirty Tanker Index recorded 43% growth on a YoY basis. It was at 1,025. Normally, the tanker rates slowdown in the second quarter.
Evercore Downgraded DHT and Revised Companies’ Target Prices
In week 30, the week ending July 27, Evercore downgraded one crude tanker company and revised other companies’ target prices.
How Did the Crude Tanker Industry Fare in Week 30?
In week 30, the week ending July 27, the BDTI rose to 759 from 723. The BDTI has risen ~8.4% in 2018.
Morgan Stanley Revised NAT and DHT’s Target Prices
On July 17, Morgan Stanley raised Nordic American Tankers’ (NAT) target price to $2.5 from $2.25.
Tsakos Energy Navigation: Analysts’ Views before Q2 2018 Results
The consensus 12-month target price for Tsakos Energy Navigation is $5.05, which implies a potential upside of 44.7% from its market price on July 12.
Analysts’ Estimates before Euronav’s Q2 2018 Results
The consensus 12-month target price for Euronav is $10.89, which implies a potential upside of 22.36% from its market price on July 12.
Week 26: Analysts’ Ratings for Crude Tanker Companies
In week 26, which ended on June 29, none of the analysts revised their recommendations or target prices for crude tanker companies.
NAT, EURN, TNK: Which One Do Analysts Like the Most?
Analysts’ consensus rating for Nordic American Tankers (NAT) is 3.33, which means a “hold.”
Euronav Takes Fourth Place among Crude Tanker Stocks This Year
Euronav’s (EURN) YTD (year-to-date) returns were -1% as of June 28.
NAT Is the Third Best Crude Tanker Stock Performer
Nordic American Tankers’ (NAT) YTD (year-to-date) returns were 7% as of June 28.
DHT Holdings Is the Top Crude Tanker Stock So Far This Year
DHT Holdings’ YTD returns stood at 30.6% as of June 28. The stock is the best performer among its peers so far this year.
Comparing Euronav’s, Frontline’s, and Teekay Tankers’ Earnings
Previously, we compared five crude tanker companies’ Q1 2018 revenue. In this article, we’ll look at their Q1 2018 EBITDA.
Comparing Crude Tanker Companies’ Time Charter Equivalent Rates
In this series, we’ll compare crude tanker companies’ performance and their outlook for future quarters.
Crude Tankers: Wells Fargo’s Revised Recommendations
On June 18, Wells Fargo upgraded DHT Holdings (DHT), Frontline (FRO), and Teekay Tankers (TNK) to “outperform.”
Why Nordic American Tankers Stock Jumped 21% Yesterday
Shares of Nordic American Tankers (NAT) closed at $2.62 on June 18—21.3% higher than the previous day’s closing price.
Frontline: Analysts’ First-Quarter Estimates
According to Reuters, the consensus rating for Frontline (FRO) is 3.33, which means a “hold.”
Analysts Estimate a 65% Fall in Frontline’s First-Quarter EBITDA
Analysts’ EBITDA estimate for Frontline in the first quarter is $33.2 million—a 65% decrease from $97.3 million in the first quarter of 2017.
DNB Market Raised Frontline’s Target Price
On May 29, DNB Market raised the target price for Frontline to 60 Norwegian kroner from 40 Norwegian kroner.
Analysts Expect Frontline’s First-Quarter Revenue to Fall 30%
Analysts estimate net revenues of $85.2 million for Frontline (FRO) in the first quarter. A sequential fall from $178.5 million in the previous quarter.
Updates on the Euronav and Gener8 Maritime Merger
Euronav (EURN) and Gener8 Maritime Partners’ (GNRT) merger should close towards the end of 2Q18—subject to Gener8 shareholders’ vote.
JPMorgan Chase Upgraded Navios Maritime Midstream Partners
On April 20, JPMorgan Chase upgraded Navios Maritime Midstream Partners (NAP) by two notches to “overweight” from “underweight.”
Analysts’ Recommendations: Top 2 Crude Tanker Stocks
DHT Holdings has the best YTD return as of April 5, 2018, among its peers. Analysts’ consensus rating for DHT Holdings (DHT) is 2.25.
Analysts’ Recommendations for Crude Tankers: A Comparison
Now that we’ve compared crude tanker companies’ 4Q17 performances, let’s discuss analysts’ recommendations.