Frontline, OSG Rise as Tanker Rates Increase, Wells Fargo Says
Frontline’s U.S.-listed shares gained 13 percent by the close of New York trading yesterday and OSG added 12 percent, figures compiled by Bloomberg show. Rates to hire Very Large Crude Carriers for single voyages jumped 87 percent in a week and smaller Suezmaxes surged 82 percent, Wells Fargo said in a note dated yesterday.
“According to our channels, the physical tanker market is still seeing upward pressure in the Atlantic Basin intraday, with relatively thin supply, which could continue putting some near-term upward pressure on day rates and potentially tanker stocks,” New York-based analyst Michael Webber said in the note.
Frontline gained 10 percent to 36.90 kroner by 11:36 a.m. in Oslo trading, leaving the shares up 45 percent this year and raising the Hamilton, Bermuda-based company’s market value to 2.87 billion kroner ($496 million). OSG, located in New York, is up 3.8 percent in 2012, valuing the company at $345.3 million.
“We do not believe this is the start of a broader, long- term tanker recovery,” Webber said.
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