Analyst Greg Lewis from BTIG, in a recommendation of shares in International Seaways (NYSE: INSW) said it simply, “The VLCC Rate Recovery Has Finally Started.” Pointing to increases in oil production, in the face of low fleet growt), he writes: “we believe the worst is in the rearview mirror for crude tankers… and expect a gradual melt up in rates into 2023.”
At Evercore ISI, Jon Chappell is also looking for a tanker run-up; in a recent piece, he told investors: “It has been quite the start of the year for tanker equities, with increases ranging from 31-213% (amid broader market weakness and recession fears), and yet the fundamental backdrop implies that the initial bounce off the bottom could prove to be just the appetizer in a multi-course (and multi-year) upturn.”
The product tankers have been strong throughout Q2. In a note following the earnings report of Ardmore Shipping (NYSE: ASC) the first shipping company to report in the current cycle, veteran analyst Ben Nolan commented that: “As expected, rates continue to soar as the product tanker market recovers primarily driven by refinery relocations and Russian-Ukraine conflict, but with 45% of MR days fixed at an eye watering $46,600 per day the rates are significantly better than we had anticipated.”
In the social media realm, Norwegian shipping guru Dr. Roar Adland, a Professor at the Norwegian School of Economics who previously spent time at MIT in Boston, and self-described “shipping nerd”, looks at the various markets and sometimes offers commentary, although not investment advice. Recently, on Twitter, he posited that: “Product tankers thrive on chaos and trade disruption. What matters is whether we will have more or less trade disruption than now going forward. Demand destruction is happening, at least in the US, and will reduce the chaos.”
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