Tankers are 'officially firing on all cylinders' - Jefferies

Nordic American Tankers

06/09/2022 09:17

** Jefferies upgrades its outlook for tankers as very large
crude carriers (VLCCs) spot rates are recovering, leading to
strong earnings forecasts this winter, in 2023 and 2024
    ** "Spot rateshave held firm across most segments over the
past six months and VLCCs have finally joined the fray," it says
as VLCC recovery was the "final piece to the puzzle"
    ** The brokerage points Suezmax and Aframax segments have
seen very strong rates, tasked with carrying increasing
quantities of Russian crude to farther markets in Asia
    ** The Ukraine war has also highlighted underlying tightness
of the oil market, it adds, inducing higher production and
refinery runs, creating a sizable increase in cargoes
    ** "With VLCCs now seeing higher rates, the tanker sector
can be characterized now as officially firing on all cylinders,"
Jefferies says, and is likely to see high demand this winter
    ** "The sector is primed for a meaningful move higher in the
coming months," it adds, despite OPEC+ agreement to cut output
by a marginal 100,000 barrels per day in October  urn:newsml:reuters.com:*:nL1N30C05O
    ** Jefferies also anticipates planned EU bans on Russian
crude and products to tighten capacity, with tankers shifting
trade patterns during the peak winter consumption period
    ** Brokerage upgrades Euronav  EURN.N   EUAV.BR , Frontline
 FRO.N   FRO.OL , Nordic American Tanker  NAT.N  and Tsakos
Energy Navigation  TNP.N  to "buy" from "hold"

 (Reporting by Juliette Portala)
 ((juliette.portala@tr.com))