Wednesday, October 7, 2015

Signposts: As Charter rates Top $100,000/day Tanker Operator Euronav Breaks Out (EURN; FRO)

First up, Bloomberg, Oct. 2:

Oil Tanker Rates Soar Above $100,000 a Day as China Hiring Jumps
The world’s biggest crude oil tankers earned more than $100,000 a day for the first time since 2008, amid speculation that a surge in Chinese bookings is curbing the number that are left available for charter.

Ships hauling 2 million barrel cargoes of Saudi Arabian crude to Japan, a benchmark route, earned $104,256 a day, a level last seen in July 2008, according to data on Friday from the Baltic Exchange in London. The rate was a 13 percent gain from Thursday....MORE
And, although we usually keep tabs on Frontline to determine the health of the haulers, Investor's Business Daily looks at Euronav (and Indian bank HDFC but that's not going to help make our point now, is it?):

Two Top International Stocks Rise From New Breakouts
The outlook for international oil demand and production is anything but certain. But Wells Fargo Securities, in an August note initiating coverage on crude-oil tanker fleet operator Euronav (NYSE:EURN), said that despite significant turmoil in global capital markets, 2015 was shaping up to be the best (oil) tanker market in a decade.

Euronav is a Belgium-based shipping-fleet operator, reportedly the largest listed operator of crude-oil tankers. The company has expanded its fleet by 50% in the past 18 months to 57 tankers (four of which are on order), giving it a 3% share of total tanker tonnage.

Wells Fargo initiated coverage with an outperform rating, citing global production increases and gradually mending demand for oil. Euronav holds its exposure primarily to the spot market, with 80% of its business there, according to research from UBS. That means Euronav shares could be volatile if tanker rates suddenly start to decline....MORE
EURN Euronav NV daily Stock Chart