Morgan Stanley Says Tanker Stock Plunge Ignores Contango: Chartby
Tanker stocks are among those worst hit by the slump in equities. Frontline Ltd. has dropped by almost half this year with Euronav NV and Tsakos Energy Navigation also suffering. But Morgan Stanley shipping analyst Fotis Giannakoulis says investors are missing a key detail from the oil market -- contango. Were daily tanker earnings to drop to $40,000, traders would be able to use the ships to store millions of barrels of crude at sea because the oil-price structure means they can sell cargoes for later in the year at a profit. Rates of $40,000 would be higher than the annual averages in 2009-2014.