Jump to content

Oil tanker stocks boom as Russia-Ukraine conflict requires longer routes


Recommended Posts

The new normal for energy consumption appears to have shifted due to Russia-Ukraine conflict, with oil tankers enjoying the benefits of longer trade routes

BG%20Group_energy_methane%20ship_8900103Source: Bloomberg

 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 17 February 2023 

Russian export restrictions drive tanker rates higher

Oil tanker stocks have enjoyed a year to remember, with many names within the sector doubling over the course of the past 12-months. Much of this upside comes amid a massive readjustment in how Europe obtains energy since the Russia-Ukraine war began. That breakdown in relations between Europe and Russia means that Europe has been seeking to fulfil their energy needs from further abroad, with crude and LNG imports largely coming by sea.

Traderoutes17223.PNGSource: Clarksons

That provides greater confidence that we could see the current resurgence extend despite the gains already seen throughout the sector. With longer journeys being undertaken, we have seen a marked improvement in the daily rates for many ships, although the 2022 surge did ease in the fourth quarter. With China expected to provide yet another source of increased demand thanks to its reopening, we are seeing tanker rates turn upwards once again of late.

Tankerrates17223.pngSource: Bloomberg

Technical Analysis

There are a whole host of oil tanker stocks to choose from, but the charts below highlights some of the prominent options for investors.

Scorpio Tankers

Scorpio has almost tripled over the past year, with the stock pushing sharply higher over the past three-weeks in particular. From a momentum perspective, short-term traders are looking at a very consistent performer of late. From an investment standpoint, the potential for another turn higher in rates could help support the stock, although it is worthwhile noting the potential for trendline resistance to come into play. The ability to push through that trendline will be key in maintaining the current near-term uptrend. Interestingly, there have been signs that Scorpio have been seen servicing ports in Russia unlike many others in the space.

STNG-Weekly-2023_02_17-07h26.pngSource: ProRealTime

Teekay Tankers

Teekay have enjoyed a 244% rise over the course of the past year, with the stock rising into a fresh seven-year high this week. It is interesting to note that the recent pullback during December lasted 5-weeks, tallying up with the June 2022 retracement. For bulls there is hope that a continued uptick in tanker rates will drive another extended surge like the one we have seen back in the second half of last year. To the downside, a break below the $26.41 level would be required to negate this bullish trend.

TNK-Weekly-2023_02_17-07h29.pngSource: ProRealTime

International Seaways

International Seaways is approaching the November peak of $46.78 this week, coming off the back of a retracement throughout late Q4. A push through resistance looks likely here, with the uptrend seen throughout the past year expected to continue. A break below $33.05 would be needed to break this wider uptrend.

INSW-Weekly-2023_02_17-07h47.pngSource: ProRealTime
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • In the wake of a brewing conflict between the Nigerian government and Binance, cryptocurrency enthusiasts find themselves on edge, uncertain about the future of their digital investments. Rumors abound that Binance, along with other platforms, might be exacerbating the Naira's devaluation against the dollar, prompting the government to take a hard stance against the exchange. Despite longstanding allegations of wrongdoing, recent events have propelled the government to escalate its actions. The situation has escalated dramatically, with Binance's P2P platform disabled and a staggering $10 billion fine imposed for alleged illegal activities. This punitive measure, coupled with last year's $4.3 billion fine by the SEC, underscores the gravity of the situation. However, skepticism lingers regarding the astronomical sum demanded by the Nigerian government. While Binance has faced regulatory challenges in other jurisdictions, its resilience and market dominance have largely endured. Yet, the potential ramifications of losing access to a key crypto market like Nigeria cannot be ignored. Complicating matters further, the Nigerian House of Representatives has summoned Binance CEO Richard Teng, issuing a seven-day ultimatum for him to address allegations of terrorist financing and money laundering, among other charges. This development casts a shadow over the future prospects of Binance in the country. Amidst the uncertainty surrounding Binance's operations in Nigeria, users are scrambling to identify alternative platforms. While other centralized exchanges (CEX) remain operational within the country, the pressing question remains: which platform will emerge as the most dependable alternative should the situation worsen? https://punchng.com/reps-summon-binance-boss-over-alleged-terrorism-financing/
    • 2024 has been a good year for crypto traders with signs of a bullish market prevailing. For the first time in 3 years, we are witnessing BTC set a new ATH repeatedly. If you endured the prolonged bear market of the previous years, you deserve these gigantic green candles! In addition to BTC's incredible run, several alts have broken out nicely; Ai, memecoin, GameFi projects and so on have spiked. Most notably in the month of February is the run of CEX tokens. According to Foresight News, centralized exchange tokens boast of a widespread price spike in February, based on data from ICO Analytics. Standing tall amongst many is BGB with 62% increase, while ASD, BNB, and KCS witnessed gains of 45%, 33%, and 22% respectively. As a BGB holder myself who’s been holding since June 2023 at an average price of $0.45, it’s been an incredible journey. I’ve witnessed it smash its ATH over again, the latest coming in February when BGB set a new ATH of $1.15. Aside the juicy ROI, BGB usecases have been a flex for me, granting me access to exclusive events, like Launchpads where I’ve also managed mouth-watering gains from my participations. BNB had a remarkable run in the last bull cycle, sadly I missed out having sold mine for peanuts. If you said I’m stoked to right my wrong with BGB this time, you wouldn’t be far from the truth!  Which CEX token(s) are you keenly observing?
    • Look at the transaction log to see why, Most of the time it's because your stop loss is set too close. 
  • Create New...