Oil tankers on a roll ahead of EU ban on Russian oil imports - Jefferies

Nordic American Tankers

29/11/2022 09:10

** Jefferies raises its estimates and price targets across
oil tankers, noting the sector's earnings power has strengthened
 "materially" as charterers prepare for EU ban on Russian crude
imports
    ** "The tanker market approaches the winter months with
tight supply and substantial potential for fleet dislocation as
the EU ban on Russian crude oil imports takes effect," it says
    ** The brokerage points out crude tanker rates, after having
been "tightly wound", have jumped to new highs as charterers are
now actively booking ships ahead of the EU ban next week
    ** "The tanker fleet is becoming stretched and traveling
longer distances," Jefferies adds, although "it remains to be
seen" how the price cap on Russian exports will play out
    ** It also flags the higher profitability has driven
refineries to boost throughput, creating price volatility and
regional arbitrages, leading to stronger product carriers
    ** The brokerage sees mid-size tankers as best positioned to
capitalise on the shifting trading patterns on their versatility
in transiting across the European and Mediterranean ports
    ** It upgrades its Q4 VLCC rate forecast to $72,500/day
against $60,000 previously and its 2023 forecast to $57,500/day,
versus $50,000, while expects Q1 as the next peak in tankers
    ** Jefferies ups its TP for Ardmore Shipping  ASC.N , DHT
 DHT.N , Euronav  EURAV.BR , Frontline  FRO.OL , International
Seaways  INSW.N , Nordic American  NAT.N , Scorpio Tankers
 STNG.N , Teekay Tankers  TNK.N  and Tsakos  TNP.N 
 (Reporting by Juliette Portala)
 ((juliette.portala@tr.com))