Declining Oil Output Attributed to Lackluster Tanker Stock Performance

Thursday, June 21, 2001
Tanker stocks have taken a severe beating this month on declining oil output and global economic jitters, but several analysts are predicting a steady recovery and consider the slump a good buying opportunity.

"Charter hire rates are expected to rebound steadily through 2001 as Iraq and OPEC increase oil production," investment bank Lehman Brothers said in a report on Wednesday.

"Recent weakness in the oil tanker sector provides an extremely attractive entry point for investors," it added.

Lehman Brothers underwrote a controversial tanker initial public offering last week of General Maritime, which was priced at $18 a share and has since traded down to a low of $12.90 a share on Wednesday.

Lehman's view that the market would recover was shared by consultancy Marine Money Capital Partners (MMPC).

"It's a skittish market," MMPC president Matt McCleery said. "But we see it as a good market for some time to come. We're getting calls from all kinds of people who are interested in buying," he added.

Lehman Brothers said that 62 percent of the world tanker fleet was controlled by owners with less than five vessels, and it was therefore still ripe for consolidation.

But not all analysts were so optimistic.

"I'm surprised share prices haven't fallen further," said an analyst with Oslo-based First Securities. "I'm afraid some investors are only looking at the quarterly results."

When the tanker market peaked at $100,000 per day for a VLCC in October/November 2000, Frontline stock stood at around 160 Norwegian crowns. The analyst said it was strange therefore that with the market now down to break-even levels (less than $20,000 a day) the share price had barely shifted. On Thursday it reached a high of $18.68.

He said Q2 would be weak, while Q3 results would be "awful" for tanker operators in general. One New York equity analyst pointed to several insiders filing to sell stock last week as an indication that they viewed the stock as having peaked.

Overseas Shipholding Group said three founding families - Recanati, Fribourg and Merkin - had filed an intent to sell five million shares at the start of last week.

OSG stock reached a high for the year of $37.50 a share on June 6, but dropped to a low for the month of $29.45 on Tuesday.

Key players at Teekay have also been selling. A spokesman said Axel Karlshoej, chairman emeritus and brother of its late founder Torben Karlshoej, had filed an intent of sale on Friday.

Having reached a high point for the month of $52 a share on June 4, Teekay shares slipped to a low for the month of $40.26 per share on Tuesday.

Maritime Reporter June 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Cruise Ship Trends

Silversea Cruises Plans New Flagship

Cruise operator Silversea Cruises has unveiled its new flagship, the Silver Muse, which will begin sailing the seas in April 2017.    Built by Italian shipbuilding company Fincantieri,

Silversea Cruises Orders Luxury Ship from Fincantieri

Shipbuilder Fincantieri has received an order to build a new luxury cruise ship for client Silversea Cruises due for delivery in April 2017.    At 40,700 grt and accommodating 596 guests,

Confidence Low in Shipping Idustry

Confidence levels in the global shipping market have fallen to a seven-year low as a glut of cargo ships, weak freight rates and excess liquidity continue to batter the industry,

Tanker Trends

NITC Claims World's Largest Supertanker Fleet

According to the head of the National Iranian Tanker Company (NITC), Iran has 42 very large crude carriers or VLCCs, each able to carry 2 million barrels of oil, reports Press TV.

Teekay LNG Partners Declares Distribution

Teekay GP LLC, the general partner of Teekay LNG Partners L.P. has declared a cash distribution of $0.70 per unit for the quarter ended June 30, 2015. The cash distribution is payable on August 14,

NITC Tankers Chart Western Course

Iran’s largest shipping company NITC, the privatized Iranian shipping company, is in talks for permission to sail in Western waters, says a report in WSJ.   NITC

 
 
Naval Architecture Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1135 sec (9 req/sec)