Most of the crude tanker stocks gave negative returns in week 5 (week ending February 2, 2018). VLCC (very large crude carrier), Suezmax, and Aframax rates dropped last week. Here is a look at how crude oil and bunker fuel prices fared in week 5 of 2018.
Oil Prices: Brent crude oil prices (DBO) closed at USD 68.23 per barrel on February 2, 2018—down 2% from the previous week. WTI (West Texas Intermediate) oil prices were down 1% week-over-week at USD 65.14 per barrel. Oil prices fell following the rise in US rig counts and a worse-than-expected buildup in US crude oil inventories.
Bunker Fuel Prices: On February 1, 2018, the average bunker fuel price was USD 444 per ton—compared to USD 445 per ton on January 25. According to Gibson’s report for week 5, bunker fuel prices at Rotterdam were USD 378 per ton on February 1, compared to USD 377 per ton last week. Bunker fuel prices at the Port of Fujairah rose to USD 397 per ton from USD 396 per ton the previous week, according to the report.
Which Companies were Impacted: Industries that transport commodities on ships incur bunker fuel costs. The industries include LNG (liquefied natural gas) carriers, product tankers, dry bulk carriers, and crude oil tankers. Bunker fuel prices closely relate to oil prices. Some of the major crude oil tanker companies are Nordic American Tankers (NAT), Frontline (FRO), Gener8 Maritime Partners (GNRT), and Euronav (EURN). GasLog (GLOG) and Hoegh LNG Partners (HMLP) are LNG carrier companies. Navios Maritime Partners (NMM) is a major dry bulk shipper.
In the previous week, Evercore downgraded Gener8 Maritime Partners (GNRT) to “in line” from “outperform.” Evercore reduced Frontline’s (FRO) target price to USD 4 from USD 4.5. Evercore raised Teekay Tankers’ (TNK) target price to USD 2.5 from USD 2. Jefferies reduced its target price for Gener8 Maritime Partners to USD 8.
In the third week of 2018, J.P. Morgan reduced its target price for Euronav (EURN) to USD 8 from USD 9. For Teekay Tankers, 12 analysts gave recommendations. The 12-month consensus target price is USD 2.02, which implies a potential upside of 75.7% from the market price of USD 1.15 on February 5.
Sea News, February 8