Tanker names extend gains on oil glut, bankruptcies
Apr. 21, 2020 11:22 AM |By: Carl Surran, SA News Editor
Tanker stocks including Nordic American Tankers (NAT +11.7%) and Teekay Tankers (TNK +3.6%) continue their climb higher, as the oil supply glut and lack of coordinated efforts to slow the flow of crude have helped fuel one of the strongest-ever crude tanker markets.
Benchmark Middle East-China tanker rates surge 24% to WS 196.04, and other major VLCC rates also advanced, including those for routes from the Middle East to the U.S. Gulf and to Singapore, according to Baltic Exchange data.
The shipping spot market "is going to stratospheric levels," Euronav (EURN -0.7%) CEO Hugo de Stoop tells Bloomberg. "We think it will go higher and higher, simply because there are more and more ships which are being taken out of the fleet for storage purposes."
Recent bankruptcy filing by Ocean Tankers and parent company Hin Leong Trading could disrupt supply and keep rates elevated over the near term, Bloomberg Intelligence says.
Regarding the bankruptcies, Jefferies analyst Randy Giveans says "if these vessels are tied up for legal reasons, this could add fuel to the fire for VLCC rates."
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