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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter April 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Cruise Ship Trends

Stomach Bug on Disney Cruise

An outbreak of gastrointestinal illness occurred aboard the the Disney Cruise Line ship the Disney Wonder last week, and more than 100 people have become sick,

Cruise Ship Makes Historic Trip from US to Cuba

Cruise ship MV Adonia sailed into Havana this morning, completing the first leg of its historic inaugural voyage to Cuba that began on May 1, 2016, from Miami,

Damen, Expedition Voyage Consultants Join Forces

Damen and Expedition Voyage Consultants team up to develop globally capable expedition ship. In response to interest from clients in the fast-growing expedition cruise market,

Tanker Trends

Libya Eastern Oil Company Blocks Tanker Loading Crude for Tripoli Rival

An oil company set up by Libya's eastern government is preventing a tanker from loading a cargo for its Tripoli rival, the National Oil Corporation (NOC), officials said on Tuesday.

Pirates Switch to Kidnapping Crew as Oil Fetches Less

Pirate gangs in West Africa are switching to kidnapping sailors and demanding ransom rather than stealing oil cargoes as low oil prices have made crude harder to sell and less profitable,

A Look Back At The Tanker Market

The fall in the oil price after the summer of 2014, coupled with the decision by OPEC to keep oil production at elevated levels has combined to support an improved tanker market,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Pipelines Pod Propulsion Port Authority Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Winch
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: 0.0689 sec (15 req/sec)