Tanker stocks led US shipping listings upward for the second straight week, and this time there was some improvement in rates to underpin the climb.
Tanker owners under coverage of investment bank Jefferies posted an average one-week gain of 7% on Friday, ahead of Monday's Labor Day holiday, leading all stocks in the Jefferies Shipping Index to a 4.2% rise on the week.
The jump outpaced a gain of 0.6% in the S&P 500 and 0.7% in the small cap Russell 2000 index. The Jefferies index is up 68.7% year to date and 57.9% compared with the corresponding period in 2020.
The performance followed a 6% gain for tanker stocks the previous week amid flat or declining hire rates, something Jefferies lead shipping analyst Randy Giveans attributed to investors shifting their horizon to an eventual tanker recovery.
The more recent week saw better rates in the key VLCC sector, which gained 15.6% to $4,022 per day. Aframax rates rose 20% to $5,648 per day, and LR2s added 12.4% to reach $14,687 per day.
Giveans noted that the gains followed a meeting of Opec+, which agreed to continue to increase production by 400,000 barrels per day for September and beyond.
"Opec+ agreed to ease production cuts by 400,00 bpd per month beginning in August, and produced the highest volume of crude oil last month since April 2020," Giveans told TradeWinds.
"The group believes oil inventories will fall in [the second half of this year], and also increased its demand growth forecast for 2022, all of which are positive for tanker rates and equities."
Five of the top 10 weekly movers were tanker owners, with Teekay Tankers, Nordic American Tankers, Tsakos Energy Navigation, Scorpio Tankers and Ardmore Shipping all gaining between 7.4% and 10.1%.
A sixth listing, Navios Maritime Partners, was the second-largest gainer during the week at 14.2% after an intra-group merger that will add 45 tankers from the fleet of Navios Maritime Acquisition to its stable of bulkers and boxships.
Containerships also won a 7% rise in share value on the back of rates that continue to test record highs. Israeli liner company Zim paced the group with a 10.5% gain.
LNG owners gained 5% even as rates pulled back, while dry bulk ticked up 1% and LNG operators fell 1%.
"For the week ahead, we believe trading volumes and interest in shipping stocks will increase as summer is now over and investors begin to position their portfolios to finish the year strong," Giveans said.
