Tanker stocks have ripped out of the gates to new gains this morning in early New York trading on a day when the Dow Jones Industrial Average opened with a 500-point drop.
The jump suggests that energy investors and others are continuing to pile into tanker stocks as a rare short-term opportunity in the oil patch amid collapsing crude prices, floating storage demand and robust spot rates.
Herbjorn Hansson’s suezmax specialist Nordic American Tankers shot to an 12% rise in the first minutes of trading.
Diversified tanker owners Tsakos Energy Navigation gained 8%, Diamond S Shipping 7% and International Seaways 4%. DHT Holdings and Frontline were both up 3%.
On the clean products side, Ireland’s Ardmore Shipping ticked up 8% and Scorpio Tankers 6%.
Steep contango
The gains came as Frontline chief executive Robert Hvide Macleod told TradeWinds that a steep contango curve in Brent Crude will offer owners opportunity for longer-term fixtures owing to a prolonged oversupply of crude.
West Texas Intermediate (WTI) crude futures entered negative territory for the first time ever Monday, while Brent crude futures fell by more than 25% for the June contract.
As TradeWinds has reported, daily turnover of tanker stocks has been on the increase in recent weeks as broader investors catch on to what could be a lucrative play in the short- to medium-term.
