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TEEKAY TANKERS CL A (TNK)

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Last Post: 1/22/2014 4:30:14 PM - Followers: 21 - Board type: Free - Posts Today: 0


WHY INVEST IN TNK

http://www.teekaytankers.com/Investors/Why-Invest-in-TNK/default.aspx


Tanker rates are a function of the balance between two main factors:

  • Tanker demand
  • Tanker supply

View Current Tanker Rates

Tanker demand
An increase in tanker demand will generally have a positive effect on prevailing spot tanker rates.

Demand for conventional oil tankers is a function of two main factors:

  • World oil demand and supply, which determines the amount of crude oil and refined products available to be transported in tankers
  • The relative locations of oil production, refining and consumption, which affects the distance over which the oil or refined products are transported

The combination of these two factors creates "ton-mile demand", which is a measure of the amount of oil transported in tankers multiplied by the distance over which it travels.

Oil demand and supply
The tanker market cannot exist without the demand for oil and in particular how much of the demand can be met by domestic production / pipeline supply and how much needs to be imported on tankers. The main driver of oil demand is the global economy while population growth is also an important factor, particularly in the developing economies where the emergence of a growing middle class is leading to a rapid increase in vehicle ownership and therefore transportation fuel demand.

As of February 2010, the International Energy Agency estimates that global oil consumption will grow from 84.9 million barrels per day (or mb/d) in 2009 to 86.5 mb/d in 2010 as a result of the expected recovery in the global economy. The majority of the growth is expected to come from emerging economies led by China.

The distance factor
The longer the distance over which oil needs to be transported, the greater the number of ships are required to service the demand. The majority of known oil reserves are located in areas far from major consuming regions, which contributes positively towards demand for oil tankers. The distance over which crude oil or refined petroleum products are transported is determined by seaborne trading and distribution patterns, which are principally influenced by the relative advantages of the various sources of production and locations of consumption. Seaborne trading patterns are also periodically influenced by geopolitical events, such as wars, hostilities and trade embargoes that divert tankers from normal trading patterns, as well as by inter-regional oil trading activity.

Historically, the level of oil exports from the Middle East has had a strong effect on the tanker market as a whole due to the relatively long distance between this supply source and typical discharge points. Over the past few years the growing economies of Asia, and in particular China, have increased and diversified their oil imports, resulting in the growth of import volumes from longer haul producers such as those in the Atlantic Basin and an overall increase in transportation distances for tankers.

Limited growth in refinery capacity in developed nations (the largest consumers of oil in recent years) and increasing refinery capacity in the Middle East and parts of Asia where surplus capacity supports exports have also altered traditional trading patterns and contributed to an increase in transportation distances for products tankers.

Tanker supply
An increase in tanker fleet supply will generally have a negative effect on prevailing spot tanker rates.

The supply of oil tankers is a function of:

  • The construction and delivery of new vessels into the fleet
  • The removal of vessels for scrapping or conversion to other ship types

The level of new vessel orders is primarily a function of newbuilding prices in relation to current and prospective charter market conditions. Available shipyard capacity for newbuildings is another factor that affects tanker supply. The level of scrapping activity is primarily a function of scrap prices in relation to current and prospective charter market conditions and operating, repair and survey costs. Industry regulations also affect scrapping levels, such as the IMO mandated phase-out of single hull tankers which takes effect from 2010.

One-off factors can also impact tanker supply. Examples include the use of ships as floating storage and slow steaming, both of which have the effect of reducing available fleet supply

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PostSubject
#138   "Tanks" for the reply... :) wiredawg 01/22/14 04:30:14 PM
#137   Fracking in the US has produced a surplus iheartweimers 01/22/14 02:15:17 PM
#136   Finally, a response from someone...LOL wiredawg 01/22/14 11:23:28 AM
#135   I've just started watching this stock. Crazy gains today. Wanekee 01/21/14 01:01:00 PM
#134   No posters here... wiredawg 01/15/14 06:29:25 PM
#133   Shipping has been getting good marks lately RJ5 12/23/13 01:54:08 PM
#132   This has taken quite a northward turn in chem8 12/23/13 01:43:25 AM
#131   Nothing negative in the earnings. Things are Ripcord01 11/08/13 04:57:15 PM
#130   Let's see what the earnings say this week. Ripcord01 11/04/13 11:56:55 AM
#129   TNK Chart: on the road back to 3........$$$ ospreyeye 11/03/13 07:57:08 PM
#128   I think this stock is again going into Ripcord01 10/09/13 07:03:43 PM
#127   seeing some interesting activity ...a lot of buying Ripcord01 09/26/13 08:53:49 AM
#126   I agree. This time I think tnk will go Kami_ss 09/24/13 09:16:29 AM
#125   This stock is much stronger than most Tanker Ripcord01 09/23/13 09:50:15 PM
#124   Bullish - should soon touch higher prices 2.84-2.98 Kami_ss 09/18/13 10:58:32 AM
#123   This is a great day to buy. SmokinJoes 08/30/13 12:33:04 PM
#122   TNK Conference Call for 2Q http://seekingalpha.com/article/1625292-teekay-tanke iheartweimers 08/09/13 09:03:39 PM
#121   ~ $TNK ~ Daily Par Sar Buy Signal Fa$tlane 07/05/13 02:31:30 PM
#120   Things may be looking up for TNK. http://www.fool.com/investing/general/2013/06/ iheartweimers 06/12/13 07:37:44 PM
#119   Taking some profits here @ 2.70. pennytrader 05/15/13 01:26:53 PM
#118   next stop 2.90. Could see the chasers hit pennytrader 05/14/13 07:04:18 PM
#117   need a 2.59 break and it's go time. pennytrader 05/13/13 04:56:25 PM
#116   time to look at TNK again -preferreds may catdaddyrt 04/29/13 09:03:09 AM
#115   Got long this today. I love these cheap Pennyfisher 02/19/13 11:42:37 PM
#114   2 Major Reasons Why Natural Gas Could Save HIS MONEY 01/11/13 08:14:28 AM
#113   Three New Bullish Technical Indicators. $TNK HIS MONEY 01/11/13 08:11:32 AM
#112   is now the time to buy xNoahx 11/14/12 10:55:24 AM
#111   Anybody have any words of optimism RJ5 11/12/12 05:22:30 PM
#110   Earnings out 8 November: DAD2 11/07/12 09:12:36 PM
#109   back to .11 catdaddyrt 08/21/12 04:51:13 PM
#108   That TNK lowered their dividend to $0.11...that's it. starbuxsux 08/14/12 09:54:42 AM
#107   your point being? conversekidz 08/14/12 09:53:26 AM
#106   Looks like these guys lowered theirs to .11 starbuxsux 08/10/12 10:38:50 PM
#105   Nope, part of my div investments conversekidz 08/10/12 10:23:53 PM
#104   Are you playing earnings here? starbuxsux 08/08/12 03:14:40 PM
#103   On a rising tide again. http://247wallst.com/2012/06/20/crude-tanker-rates-to-ri iheartweimers 06/20/12 11:31:20 PM
#102   I got stopped out at 4.00 this has catdaddyrt 06/01/12 07:09:03 AM
#101   ouch ! -6.8% catdaddyrt 05/07/12 05:13:25 PM
#100   nice bounce off of those red days catdaddyrt 04/17/12 11:30:00 AM
#99   Go TNK! conversekidz 04/17/12 09:48:19 AM
#98   The tides will rise to their former levels, conversekidz 04/03/12 11:32:18 PM
#97   Cool Infographic explaining TNK business model. conversekidz 03/31/12 12:58:38 PM
#96   UPDATE 1-U.S. tanker industry sets sail for better conversekidz 03/31/12 12:51:04 PM
#95   I will be happy to see it back catdaddyrt 03/30/12 03:39:22 PM
#94   $6 is just an after thought conversekidz 03/30/12 01:36:43 PM
#93   Testing 6 again conversekidz 03/30/12 11:18:09 AM
#92   Analyst upgrade to Buy from Hold at Dahlman. Rbreb13 03/28/12 12:30:34 PM
#91   imo it is undervalued - it was on catdaddyrt 03/28/12 12:07:17 PM
#90   imo it is undervalued - ot was on catdaddyrt 03/28/12 12:07:17 PM
#89   6 bucks!!!! RJ5 03/28/12 11:19:05 AM
PostSubject