I own SFL and TK.
By Daniel at 19 January, 2010, 5:51 pm
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From Doug Mavrinac’s upgrade of the tanker sector: “In fact, we believe the period beginning 2H10 looks very similar to 2H02 when the global economy was beginning to improve, crude oil demand was rising, crude oil inventories were declining, and OPEC began to increase production to balance the oil market all at a time when Category 1 single hull crude oil tankers (essentially those built before 1982) were facing regulatory mandates imposed by the International Maritime Organization requiring their demolition by April 5, 2005. With similar circumstances in place in 2010 except that the current mandate by the IMO requires essentially all remaining single hull vessels to be demolished by YE 2010, we believe the crude oil tanker market is potentially set up for a very strong multi-year cyclical upturn similar to 2002-2004. Deja vu all over again? Possibly. But, one thing is for sure, as can be seen in the chart below which captures the past two tanker cyclical upturns, OPEC production is the primary driver for crude oil tanker charter rates.”
Equity Specifics:
- FRO to BUY (from underperform) with target $44 (was $18).
- NAT to BUY (from underperform) with target $41 (was $25).
- OSG to BUY (from underperform) with target $22 (was $60).
- GMR maintains BUY – though raises target to $12 (from $9).
- DHT maintains BUY ($6).
- ONAV maintains BUY ($5).
- SFL maintains BUY ($19).
- TK maintains HOLD though raises target to $26 (from $25).
- TNP maintains HOLD though raises target to $18 (from $17).
- smarm
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