Week 13: Crude Tanker Rates Touch a Multi-Week High
Market Realist By Sue Goodridge
43 minutes ago
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Week 13: How Did Crude Tanker Stocks and Rates Change?
(Continued from Prior Part)
Baltic Dirty Tanker Index
The BDTI (Baltic Dirty Tanker Index) closed at 833 on April 1, 2016. It had closed at 809 at the end of the previous week. The index rose every day last week. This came as relief to tanker investors, as the BDTI fell every day in the previous week.
The BDTI tracks shipping rates for crude oil transportation on representative routes. Researchers and analysts follow this index to assess companies’ revenues and potential earnings of crude oil (USO) tanker companies like Frontline (FRO), Teekay Tankers (TNK), Tsakos Energy Navigation (TNP), Nordic American Tankers (NAT), DHT Holdings (DHT), Gener8 Maritime (GNRT), Navios Maritime Midstream Partners (NAP), and Euronav (EURN).
Investors who are interested in broader exposure to the industrials sector can invest in the SPDR Dow Jones Industrial Average ETF (DIA).
Seasonality
Seasonality is a known factor in tanker rates. It’s also important to look at the index on a YoY (year-over-year) basis. Every day last week, the index was above last year’s levels. On April 1, the index was 3% higher than last year’s levels.
Tanker rates
After a drop in VLCC (very large crude carrier) rates in the previous week, week 13 saw tanker rates surge by 52%. Weather-related delays in Chinese ports pushed crude tanker rates from $51,253 per day on March 24, 2016, to $78,045 per day on April 1, 2016, for the VLCC benchmark route, according to Weber’s weekly report.
Charterers saw some resistance from Suezmax owners, and rates rose by only 7% to $24,817, according to Weber’s weekly report. Norwegian ship broker Fearnleys expects rates to remain stable this week.