Tanker Euphoria Drives Ratings Bump

Monday, July 17, 2000
The cyclical nature of the tanker market continues its trend upward, a development which has Lazard & Freres & Co. stamping both Nordic American Tankers (ASE: NAT) and Knightsbridge Tankers Ltd. (OTC- VLCCF) as shares that will “outperform.” In a pair of separate corporate profiles released June 29, Lazard & Freres’ James L. Winchester noted that “VLCC freight rates are continuing their meteoric climb in the second quarter, averaging $46,688/ship day, up an impressive 76.3% from $26,489/ship day in the first quarter and up 127.9% from $20,488/ship day generated in the second quarter of 1999.” In accordance with this information, Winchester has raised VLCCF’s 2000 dividend estimate to $2.32 from $2.29, a dividend which implies of yield of 11.9%. There are a myriad of factors driving the current VLCC surge, chief among them increased oil production and a lack of qualified tonnage. Oil production was boosted by a 708,000 bpd rise in OPEC quota, agreed June 21 to help keep oil pricing in the desired $22-$28 range. In addition, there has been increased scrapping activity, as older tonnage has paid a high price due to recent disasters such as Erika. Scrapping is running an estimated 14% ahead of 1999 rates, and delivery of new tankers is expected to slow to 16.1 mdwt from 20.7 mdwt. In exploring Nordic American Tankers, Winchester noted that average Suezmax tanker freight rate has averaged $34,883/ship day through the second quarter, up 134 percent from $14,910/ship day generated in 2Q 1999. For NAT, Lazard Freres raised 2000 dividend estimates to $2.15 from $2.08, implying a yield of 12.7%. In its analysis, based on the OPEC increase and a five percent increase in worldwide oil demand projected by IEA, Lazard Freres believes these trends will continue to benefit demand for tankers into 2001.
Maritime Reporter January 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

Huisman Cranes for New Maersk Subsea Support Vessels

In December 2014, Huisman secured a contract from COSCO (Dalian) Shipyard for the delivery of four customized 400mt Rope Luffing Knuckle Boom Cranes and two 100mt

Coast Guard Cutter William Trump Commissioned

The Coast Guard Cutter William Trump was commissioned during a ceremony at Coast Guard Sector Key West Saturday Jan. 24, 2015. The Trump is the 11th fast response cutter in the Coast Guard fleet.

World's Largest Ship Sparks Outrage

Jewish groups in the Netherlands and Britain have reacted with rage and despair at the arrival in Rotterdam of the world's biggest ship, the Pieter Schelte, named

Finance

Study Examines Impacts of Inland Waterway Investment

The National Waterways Foundation (NWF) has commissioned and released a two-year study to examine the U.S. inland waterways’ national economic return on investment

Gypsy Moth Clause Takes Balanced Approach to Risk

A new BIMCO clause provides a simple, practical and commercial solution focusing on the basic obligations and responsibilities of owners and charterers when dealing with the Asian Gypsy Moth (AGM).

Maersk Line Gets new AEO number

Maersk Line has been re-certified as an Authorised Economic Operator (AEO) with the AEO-F, the highest achievable accreditation in the European Union programme.

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Navigation Pod Propulsion Port Authority Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1425 sec (7 req/sec)