More than half a dozen tanker stocks absorbed heavy losses in trading on Tuesday as they lost favour with investors watching oil prices rise again and day rates losing steam.
Global benchmark July Brent crude futures rose 14% to $30.97 per barrel while West Texas Intermediate June numbers soared 31% to $24.56 per barrel as analysts said the re-opening of more global economies and US states stoked demand hopes.
However, the same scenario spelled trouble for the tanker owners as it posed a threat to further floating-storage opportunities and possibly a sooner start to inventory destocking, even as day rates continued to weaken.
Bullish tanker market analyst Randy Giveans of Jefferies offered hope that the reversals were temporary.
"The market is myopically focused on Brent prices rising and the forward curve contango tightening," he said.
"Spot rates have softened, but mostly due to Far East holidays and charterers pulling back enquiries. We expect rates to rally soon once the floating-storage fixtures start loading crude and get pulled out of the active fleet."
Retail favourite Nordic American Tankers dropped 13% to $5.25 in a further reversal of its recent good fortunes. This means from a peak market capitalisation of $1.08bn earlier this month, it has plummeted to $773m.
The first New York-listed company to report quarterly earnings, Ardmore Shipping of Ireland, fell 12% despite recording its strongest three months of earnings ever.
It appeared to be one more victim of the indiscriminate wave that crashed over Diamond S Shipping and Euronav, both down 12%, with Teekay Tankers falling 11% and Frontline slumping 10%.
But the day's biggest loser was the bulker company that trades like a tanker owner, Scorpio Bulkers. With its 8.5% stake in sister company Scorpio Tankers, the bulk outfit shed 15% on the day. Scorpio Tankers drooped 9%.
