lakers - Libya's civil unrest is just a power grab, and the power is desired so as to control the oil riches. Things appear to have met a compromise, as Libya is now pumping oil. The country need money in a big way, as they lost so much when the ports were closed. I suspect they will pump like mad to fill the coffers, they don't care if Brent drops in price. If Brent continues to fall, the contango will widen.
so eloquent of you. No idea in the world?
Keep your head in the sand and make believe TNK will be fine is spot rates fall. They have no chance of servicing their debt if spot drops sharply. It's why the CEO was ased about the debt (and he have a classic non-answer).
TNK is far from best of breed, they have massive debt, and al least two ships that are 15 years old and either needed an expensive survey, or need to be sold. For a small company like TNK, two ships matters.
You're far too emotionally invested in this company.
lakers, contango can spike spot rates if it gets deep enough to make it worth storing on a ship as opposed to a tank farm. At present, commodities traders are using tank farms. Watch the brent curve and watch the daily price of brent. What makes it all of interest is we've never had a contango with brent over $100.
What's needed now is for Libya to pump like mad, and if the others cheat on their quotas, Brent will tumble and ships will be needed. Early bets are being placed, it might turn to a stampede if Brent falls to 98. Contango also benefits Suez (and Afra) as they pick up the slack. Nordic American just chartered their newest Suezmax to a trader. Good luck.
clueless one - speculators, or more specifically wall street bankers, made hundreds of millions in the last contango. TNK benefitted from a lack of available ships due to these "speculators". Chevron is "speculating" as you read this.
If spot crashes, TNK is dead, they cannot service the debt with low spot rates.
As far as "grabbing market share", are you aware a shipper in BK can compete with them for those routes?
You're far, far out of your league here.
pb, your slip is showing. (goole it). Contango is far from fancy, the term has been around linger than you've been alive, and you're "up there" in years. And contango is anything but nonsense, it's a rare event and it turns the commodities market in its ear. TNK might benefit via the luck of the inverted Brent curve. Certainly you're aware the largest oil trader in the world just hired a suezmax due to the fancy sounding "contango", as did Chevron. Of course you did. You've displayed such insight, so many times.
This is entirely based on the emerging contango trade. The deeper it goes, the more ships get consumed. One of NAT's ships just got plucked by Mercuria, so the trade is on. How log is anyone's guess.
Lakers_fan - the LOOP disruption is nothing when measured against the real story, which is Brent contango. At present there's enough of a contango to make it worthwhile to utilize ships to transport oil to tank farms, and then then to utilize them again for physical delivery at some later date. If the contango gets very deep, then the oil traders will start to utilize ships as floating storage. What makes the whole thing unique is we've never seen this type of contango with Brett over 100. Further, the market has completely discounted Iraq and the Ukraine. If Libya turns on the taps, Brent will tumble even more.
What does this do for FRO? Ships are getting taken out of the pools, thus reducing availability. An ongoing contango, and ideally a super contango, can push spot rates.
Another highly unusual event unfolding, but it does not impact FRO, is Afra spot rates are exceeding LCC spot rates. Why unusual? An Aframax holds 1/4th the amount of oil as a VLCC.
It's not a factor. Quantuon's so called "unrest" is a far too simplistic trade, and it underscores how little some people know about oil futures.
At present there is an oil glut, which will get larger if Libya increases even more. Oil futures are in contango, which is why you saw the pop in FRO early Friday as contracts were settling, and the idea of floating storage came into play, VLCCs being the choice for storage on the water. If VLCCs are parked, it helps Afra and Suez because there is less tonnage. If, repeat if, the contango persists, a condition not seen in more than a few years, TNK will benefit as traders store oil with an eye toward selling it into Winter.
It's entirely possible for the oil markets to benefit shippers without violence. It's never good to look for any benefit due to violence, unless someone is a selfish pig hoping to pad his pockets.
TNK does not ship NG thus no need to consider it.
so simplistic. Institutional money doesn't invest blindly based on an over/under. Can you remind me of your expert knowledge on the foreclosed VLCCs? You has such sharp insight back then. Maybe I'm confusing you with someone else. And there some other guy claiming TNK was going to hit 60 pretty soon. Of course, Afra rates would have to go for approx 250K per day for a year, but hey, why not?
what a ridiculous comment. Fairy tales are a fantasy, and fantasy thinking is exactly what to avoid when investing. TNK at 60? TNK hockey sticking on "fleet utilization" due to "propreitary research". Pure fantasy. Crude shipping is in a secular decline, all you can wish for is a pop if some ships get out of position.
If you want to stay in carbon transportation, the future is in NG and all of its derivatives.
listen to the call. A few analysts were bold enough to ask a real question, but they got non-answers. They asked about the divvy, buybacks, and the debt bomb. Now why on earth would they ask? TNK is a joke, they are treading water. Laker_fan was wise to bail.
Feeling better about buying KMP ... never underestimate Richard Kinder, or Wilbur Ross for that matter.
Bruce Chan saddled them with charter-ins. TIL is going to contribute very little - 600K per quarter, and yet how many million shares were paid out? 15M? Increase in dividend? Nope. Buyback? Nope. Whats their biggest concern? As I've been saying all along: massive debt bomb.
If any TNK investor hopes to see this company survive, hope for a surge in Suexmax rates, which is the only pure exposure they now have. And if you want pure Suex exposure, may as well buy NAT.
Not really, they chartered-in too many. What you want to cheer for now is Suez, which are mostly on spot. Call was a dud, but what else should be expected.
perhaps now the amateurs will understand it. Can a single yahoo poster move a stock? No. Libel or slander? No. Huge increase in fleet utilization per proprietary research done by Quantuon? None. Market yawing over earnings release? Yes. Why? Look at sequential and YOY stripping out VLCC sale. The much anticipated TIL tech/commercial extra gravy income which got some investors so wet? Nothing there. All the greenhorn CEO can do is sound the horn for less charter and more spot, but this has been suggested for 6 months now.Read the release, and discount every word typed after "we believe". The "we believe" part keeps everyone out of jail, and it sucks in starry eyed investors.