33140
Oil Tankers Rule the Seas
World Economy

Oil Tankers Rule the Seas

The most destructive oil crash in a generation is giving ship owners a billion-dollar windfall.
With the Organization of Petroleum Exporting Countries abandoning output limits in a drive for market share, ships that carry as much as two million barrels a trip are in demand to haul crude from the Middle East to Asia and North America. While oil prices fell about 35% in 2015, average earnings for these carriers jumped to $67,366 a day, the most since at least 2009, according to Clarkson Plc, the world’s largest shipbroker.
“The stars are aligned for us right now,” Nikolas Tsakos, the chief executive officer of Tsakos Energy Navigation Ltd., said in an interview at Bloomberg’s New York offices, adding that falling oil prices will likely stimulate demand and cargoes next year.
Tanker analysts are predicting the rate boom will persist for many of the same reasons oil forecasters are bearish. OPEC shows no sign of reversing its market strategy. At the same time, the US just repealed a four-decade old limit on its exports.
With on-land inventories already at record levels, this could mean more barrels will eventually be stored on ships, further increasing profit, said Tsakos.

  Biggest Operators
The biggest tanker operators who manage fleets from Europe are Euronav NV, based in Antwerp, Belgium, DHT Holdings Inc., Frontline Management AS, which runs Norway-born billionaire John Fredriksen’s tanker fleet, and Tsakos Energy in Greece. All have seen their shares rise this year while most energy producers have fallen.
“We are benefiting from what is currently a challenging environment for the energy sector,” said Svein Moxnes Harfjeld, joint chief executive officer for DHT, in an e-mail. “We expect 2016 to be a rewarding year.”
Tsakos, whose company gained 4.3% in New York trading this year, said the increase should have been higher, given that “the underlying business is doing very well.’’ Too often, tankers are lumped in with other oil industry services in the minds of investors, he said.
“Investors look at tankers as an oil service, which we are,” Tsakos said. “But I think very few have identified that this side over here is the only oil service that’s positively affected by the dropping oil prices. I hope in the new year that this will be recognized, and our share prices are moving in the right direction.”

  Earnings to Double
While rates are forecast to slip in 2016, the ships will still earn $46,400 a day, the second best year since 2009, according to the median of six analysts surveyed by Bloomberg and historical data from Clarkson.
The average carrier is about 332 meters long, or almost 1,089 feet, data from IHS show. The carriers’ earnings will more than double this year, according to analyst estimates compiled by Bloomberg. The extra rates would work out at more than $5 billion in additional revenues if applied across the entire fleet.

Short URL : http://goo.gl/llsCbE
  1. http://goo.gl/xf7dKx
  • http://goo.gl/X8OVkE
  • http://goo.gl/1XrGLe
  • http://goo.gl/j9p9Y2
  • http://goo.gl/AYBl9V

You can also read ...

Philippines Growing Faster Than Expected
The Philippine economy grew at a faster than expected 6.9%...
The British economy will hardly expand 0.3-0.4% per quarter through to June 2018, with growth of 1.5% this year and 1.3% the next.
British economic growth will remain tepid over the coming few...
Italy Braces  for $1b Loss
Italy’s failure to qualify for the 2018 football World Cup in...
Siemens to Cut 6,900 Jobs
Labor unions have reacted angrily to layoff plans unveiled by...
Cheap ECB Cash Still Key for Eurozone
The eurozone economy remains dependent on cheap credit and the...
The rupee, bonds and stocks rallied after Moody’s upgraded India to Baa2 from Baa3 and said reforms being pushed through by Modi’s government will help stabilize rising levels of debt.
Forget India's economic troubles this year. Moody's thinks...
Smaller increases at the gas pumps helped Canada’s  annual rate of inflation ease in October.
Canada›s rate of inflation came in at 1.4% on a year-over-year...
IMF Sees Economic Revival in Myanmar
The International Monetary Fund on Friday forecast an economic...

Trending

Googleplus