Signs that oil demand is recovering are boosting Overseas Shipholding Group (OSG) chief executive Sam Norton's optimism for the second half of 2020 and beyond.
Alongside the company's second-quarter results — in which the Jones Act tanker owner reported a $6.4m profit — Norton said the third quarter was shaping up to be slow owing to Covid-19, a bevy of dry dockings and seasonal weakness.
But, he said, there are positive signs, too.
"Available data indicates that this [oil demand] recovery is, with the exception of jet fuel demand, well underway," Norton said.
"Absent a reversal of this encouraging trend, there is cause for optimism that in terms of both rate and utilisation, a restoration of a balanced and healthy market conditions is foreseeable in our key markets."
The second-quarter profit is a reversal from the $1.7m loss reported for the same three months last year and was driven by the stability provided by its ships put on time charter late last year.
OSG's revenue grew by nearly 30%, from $88.5m in the second quarter of 2019 to $114m for the second quarter this year.
Of that $114m, $96.6m was from time charters.
The Florida company attributed the overall revenue jump to the addition two MR tankers — the 50,332-dwt Overseas Gulf Coast and Overseas Sun Coast (both built 2019) — plus a new articulated tug barge and the three crude oil tankers added after the Alaska Tanker Co acquisition. It also made two trips for the government of Israel in the quarter.
In early trading on Friday, OSG shares were up $0.06, or just under 3%, to $2.31.
