Platou’s Christmas stocking
RS Platou Markets is suggesting shipping investors take a twist on a traditional festive favourite.
Stocks, not socks, are the order of the day for Christmas 2014 as crude tanker rates enjoy a merry run and look forward to a happy new year.
Its seasonal cheer came amid the digesting of an IEA report that hinted floating storage could return given the current overproduction in the oil market.
Should the market react as it did in 2009, utilisation would rise by 4\%, Platou Markets’ analysts Frode Morkedal and Herman Herman said.
A further 1.5\% boost to utilisation levels may come from reduced Russian oil exports to Europe being replaced by shipments from further afield, they calculate.
“Just to illustrate the upside, a combined jump in utilisation of 5.5\% would lift annual VLCC rates to $90,000 per day, everything else equal,” the analysts said.
“Of course, the fleet will sail faster to take advantage of these opportunities but the net result should still be positive, in our view.”
They added: “With the likelihood of higher tanker rates next year, we expect asset values should improve, hence tanker stocks should have been trading with a premium to NAV.
“Our holiday gift advice is therefore to buy tanker stocks: attractive valuation, momentum in rates and estimate upgrades should underpin improved share prices in 2015.”
Morkedal and Hildan conclude that if Opec retains its present output, 2015 could be a “fantastic year” for the tankers.
source:www.tradewindsnews.com
