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Teekay Tankers Ltd. Message Board

  • jd9919 jd9919 May 23, 2011 2:40 PM Flag

    Okay, question for Coursonc

    Acknowledging that you are the resident expert, when do YOU foresee tanker rates recovering?

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    • That's too bad. I wonder why management is so optimistic relative to the other tanker companies ...

      It looks like we hit our Goldman bottom. Hopefully, TNK won't be pricing the secondary until most of the hedgies have covered and gone long.

    • Domestic production to increase based on better fracking technology:

      http://www.nytimes.com/2011/05/28/business/energy-environment/28shale.html?_r=1

      Greenpeace livid.

    • Saur is correct. Since TNK's fleet is comprised of Aframaxes, which are smaller than the VLCCs, holding only about 1M bbls of oil, they are not the ship of choice (compared to the VLCC with 2Mbbl capacity) to store oil at anchor. Plus, with relative high oil prices ($100+), there is a higher degree of pricing risk than, say when it was $34bbl
      http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_T/threadview?bn=72417&tid=1597&mid=1659
      due to storage at Cushing maxed out, and with severe Contango.
      The USA SPR (or SPOR) is currently at 727Mbbls,
      http://www.fossil.energy.gov/programs/reserves/spr/index.html
      of which 292Mbbls is 'sweet', or low in sulfur content and are stored in huge underground salt caverns along the coastline of the GOM. The SPR has been authorized (in 2005) by Congress to fill up to 1 billion BBls but to date, they have not found a site to construct additional storage facilities, although this process is ongoing.
      You can see the annual sequential chart of fills (pdf page 24) here,
      http://www.fossil.energy.gov/programs/reserves/publications/Pubs-SPR/Annual_Report_2009_Final.pdf

      There are 4 main components (reserves) of the US SPR:

      1)Bryan Mound (3M SW of Freeport, TX) 254Mbbls in 20 caverns
      2)West Hackberry (25M south of Lake Charles, LA) 228Mbbls in 22 caverns
      3)Big Hill (26M southwest of Beaumont, TX) 171Mbbls in 14 caverns
      4)Bayou Choctaw (12M southwest of Baton Rouge, LA) 74Mbbls in 6 caverns
      ----------
      727Mbbls total

      coursonc

    • Dang, woulda been a nice hedge against falling oil prices ...

      Thx

    • Jd...I watch this company, the overall Oil market and its shipping sector pretty closely. Both on a supply-demand fundamental level, and from a technical trading perspective. The real tautological conundrum is when to shift from being the longer term investor, to the shorter term trader, and maximize profits, by protecting capital and then re-entering at a lower price. Of course, I have already done this, as you pointed out, so that phase is over and now its time to watch for a re-entry.
      For some, this approach is too time consuming, risky, complicated, tedious, or just basically 'rubs them wrong'. But I pauciloquently postulate an euonym stratagem whereby you never forget this is a cyclical stock, in an ubiquitous commodity business, and timing those peaks and valleys astutely as a well informed trader will always be more propitious than the constant investors chimera of steadily increasing profits and 'dividends'.
      There is no doubt, that I will post when I see what I perceive as an above average entry point in TNK shares. I will also post in real time, when I re-buy, and at what price. This point needs to be both when the fundamentals have reached a point and either have stopped deteriorating, or show sustainable improvement metrics, AND the technical's allow buy-side action with lower than average risk. This is almost always right after a high volume sell-off, possible capitulation, or evidence of higher than normal short-covering. I usually am able to buy, in equal tranches three times, such that, sans negative data, if my first buy was not the 'bottom', then the cheaper it gets, the better I like it, and I buy again. This way, you remove the insidious emotion that larger buys entail and you initially are more of an investor, 'buying fear', than a trader, until market conditions bring back the 'greed', which you can then begin to sell.

      Hey, it's better than being a coprophagous Xylopolist or even practicing xerophagy, lol.

      coursonc

    • My guess is that if we get another bona fide and verified recession, instead of TNK or any stock/bonds, people will flood into gold/silver and TIPS. Maybe some high quality corporate bonds. Nominal US bonds are already crap for yield and there's no way anyone would buy munis.

    • Isn't that like asking 'when are we going to catch or kill Osama Bin Laden'? The right answer is probably 'eventually', but I can't imagine how anyone would know when or even approximately when. Even if vessel orderbooks show a decrease in # of orders and this suggests a recovery in 3-4 years, a year down the road orders could spike again. If you have access to time charter rates or FFAs, you could probably get a good idea of what the market as a whole predicts. Just my unsolicited .02.

      • 2 Replies to ginchuang
      • I'm having 'puter problems right now. One of the systems I built back in '01 using SCSI RAID 10 and 4 Raptor drives blew the motherboard. I originally thought it was the PS..then the CPU, or a RAM chip,...using RDRAM has compounded the troubleshooting, as my other legacy scrap systems used SDRAM or DDR. It was one of my favorite systems, at the time. You should see my kitchen, its a maze of parts, wires and boards, lol. I'm running one system, dual bootlegged OS, (XP pro and Vista) with the drives and cables hanging out of the case, with extension cords going to the printer, monitors and DSL.
        Then you swap CPUs, and the heatsink wont fit, or it locks on boot as the Bios cant support the higher speed, lol.
        I always hate how the hard drive manufactures make you play the JP1 jumper game, switching to master, slave, or cable select with the stupid jumper that you always drop when switching it, or you forget to switch it, and have 'controller' issues on boot. How come Maxtor or WD cant solve that, and make the HDD know what it is on startup?
        Lots of fun.
        Anybody got an extra ASUS P4-E MB?

        As far as the Tanker stocks go, I think its a little late to sell. I would just hold as these company's have their 'lulls' on overcapacity and low demand, but shipping oil is never completely going out of vogue, and these periods of low earnings cause higher scraping, lower shipbuilding and eventually the pendulum rights itself.
        I'm still looking for a $8 entry at some point :)

        coursonc

      • Good point.

        Coursonc did a decent job of picking TNT's top, so I figured I'd give him a shot at this. Goldman says 2012, but then again, before that, Goldman was saying the second half of 2011 ...

 
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