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Created: 07/02/2009 12:37:06 PM - Followers: 35 - 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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#437 With recent intrigue in ship stocks centered around LegitStockFly 06/20/2020 08:17:30 AM
#436 Added here. Earnings on Thursday Copper Hunter 05/19/2020 01:01:36 PM
#435 TNK is ready for a new spike starting DeadBatBounce 05/01/2020 09:23:48 PM
#434 All the tanker companies are going to have conix 04/24/2020 10:25:57 AM
#433 TK CEO stated that TNK has a better KJAX 04/23/2020 07:35:10 PM
#432 Teekay Tankers: A Hedge Against The Oil Glut conix 04/05/2020 08:54:52 AM
#431 * * $TNK Video Chart 03-10-2020 * * ClayTrader 03/10/2020 05:23:34 PM
#430 * * $TNK Video Chart 02-27-2020 * * ClayTrader 02/27/2020 04:06:42 PM
#429 Bought TNK today and more TK, I think KJAX 02/07/2020 01:23:28 PM
#428 I agree. Paying-Off Debt is strengthening TNK's Balance Chicago-Paul 02/04/2020 11:05:20 AM
#427 That and the coronavirus. I added a KJAX 02/03/2020 08:20:18 AM
#426 Now we know the reason for all of Chicago-Paul 01/31/2020 05:07:43 PM
#425 It appears that the Shorts have taken hold Chicago-Paul 01/31/2020 11:07:51 AM
#424 TNK had some descent news yesterday and continuing KJAX 01/29/2020 12:30:21 PM
#423 Turning too BS.....5 days RED....F U Zacks the rook 01/15/2020 09:35:18 AM
#422 TNK continues to go upward as we enter Investolator 01/03/2020 04:22:30 PM
#421 On fire since split the rook 12/19/2019 03:54:43 PM
#420 BULLSHIT 1 share trades to knock it back the rook 12/18/2019 10:04:02 AM
#419 The reverse split killed a bit of momentum Ripcord01 12/15/2019 06:40:03 AM
#418 * * $TNK Video Chart 11-14-19 * * ClayTrader 11/14/2019 05:40:09 PM
#417 A monster year so far for TNK . SmallCapStockGuy 11/14/2019 02:33:22 PM
#416 News: $TNK Penny Stocks To Buy Or Sell whytestocks 11/14/2019 02:30:24 PM
#415 Looks like they won't have dividends any time KJAX 11/14/2019 09:25:17 AM
#414 I screwed up selling when I did these Kallie 11/13/2019 07:36:45 PM
#413 If the rates stabilize and stay higher than KJAX 11/12/2019 03:18:50 PM
#412 TNK Chart conix 11/12/2019 11:18:51 AM
#411 Good for you! I took a beating on Kallie 11/11/2019 09:24:29 AM
#410 Lucky to get out a penny above entry the rook 11/09/2019 12:48:32 PM
#409 Earnings next week, I got caught in this Kallie 11/08/2019 11:23:00 AM
#408 Zacks #1 buy for November = WHY???? I the rook 11/08/2019 09:54:34 AM
#407 It's been a long ride for me, but KJAX 10/24/2019 06:27:21 PM
#406 TNK shipping heaven. The power of sector trading boom TrendTrade2016 10/24/2019 01:06:49 AM
#405 * * $TNK Video Chart 10-23-2019 * * ClayTrader 10/23/2019 05:25:42 PM
#404 Charts again...Cha Ching! conix 10/23/2019 01:44:09 PM
#403 TNK long and strong!!! TrendTrade2016 10/23/2019 10:54:43 AM
#402 And on that positive news, shorts are rushing H8ster 10/22/2019 11:29:14 AM
#401 * * $TNK Video Chart 10-21-2019 * * ClayTrader 10/21/2019 04:21:27 PM
#400 Pattern post surge continues. Early morning dip H8ster 10/21/2019 11:38:26 AM
#399 TNK shipping sector is a dream come TrendTrade2016 10/17/2019 10:10:50 AM
#398 * * $TNK Video Chart 10-14-2019 * * ClayTrader 10/14/2019 05:53:59 PM
#397 another solid day SmallCapStockGuy 10/14/2019 04:55:35 PM
#396 Tanker Stocks have been doing great. conix 10/14/2019 12:34:18 PM
#395 TNK boom outta the gate!! TrendTrade2016 10/14/2019 09:55:47 AM
#394 TNK has been trending for a while and SmallCapStockGuy 10/13/2019 05:16:14 PM
#393 TNK 2.40 soon TrendTrade2016 10/12/2019 04:19:44 PM
#392 90% of this board only play otc garbage!! TrendTrade2016 10/11/2019 04:06:57 PM
#391 Strange how quite the board is. faceoff 10/11/2019 11:02:05 AM
#390 TNK on fire!!! TrendTrade2016 10/11/2019 09:39:28 AM
#389 TNK boom...gappa!!! TrendTrade2016 10/11/2019 09:27:18 AM
#388 TNK...holding long...shipping sector is in play...stay tuned for TrendTrade2016 10/11/2019 08:49:22 AM
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