Best Oil Stocks Right Now • Daily updated charts • Benzinga
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Oil tankers are ships designed for the transport of bulk oil and / or its by-products. Tankers can be tankers that transport unrefined crude oil or tankers that transport refined products from refineries to consumer markets. Tanker stocks provide investors with access to companies that own, operate and / or lease different types of tankers and related facilities.
Global demand for oil has increased from 60 to 70 million barrels per day (BPD) to 30 million BPD due to the COVID-19 pandemic. Despite this, oil companies saw increased interest in services during the pandemic as oil producers relied on these companies to store oil in tankers until the oil market improved. Since then, oil sales have increased somewhat, pushing the rental price of tankers from a high of as high as $ 200,000 per day during the pandemic to more normal levels of $ 25,000 to $ 40,000 per day.
Benzinga’s choices for the best tanker stocks include those of the world’s largest tanker shipping companies. The shares of these companies trade on major US stock exchanges, such as the New York Stock Exchange (NYSE) and the Nasdaq Exchange (NASDAQ).
Overview: Tanker Inventories
The transportation of crude oil began in the 1860s when the product had to be transported from its source to refineries. Products were generally transported by rail and later by iron and steel pipelines.
Tankers were more widely used in the 1940s, but tankers began to dominate the oil transport market as the oil industry developed and oil was imported from other countries. Large tankers can transport a large amount of crude and petroleum products for a very low cost per barrel and are basically the only practical way to transport crude oil across the oceans.
While tankers provide the oil industry with transport and storage capacity, tankers carry risks, as evidenced by the massive Exxon Valdez oil spill in 1989 which caused significant environmental damage. The Exxon Valdez ran aground in Prince William Sound and spilled nearly 11 million gallons of crude oil into nearby waters which then extended some 1,300 miles along the Alaskan coast.
The oil tanker business may also experience fluctuating demand for its services due to the noticeable price changes seen in the associated crude oil market. Additionally, the likelihood that demand for oil will decline as electric vehicle sales increase means that buying stocks of oil tankers may not be an optimal choice for long-term investors, although short-term traders. term that closely monitor oil prices may well negotiate. tanker stocks.
Income investors who prefer to invest their money in dividend-paying stocks might also benefit from owning oil tanker stocks. Depending on market forces, however, they may not achieve significant capital appreciation in the price of their oil tanker shares and may even see the price of those shares drop.
Best Online Brokers for Oil Tanker Stocks
The petroleum stocks selected by Benzinga all trade on the major US stock exchanges, so you can trade them through any stock broker that provides access to these markets. Most major US brokers will also execute commission-free orders on these stocks. The table below provides a comparison of the online brokers that you can use to trade stocks of oil companies.
Features to look for in tanker inventories
- Fleet size: The number and size of oil transport vessels and the types of products transported have a direct impact on the bottom line of each oil company. The maintenance costs and the potential liabilities that the company could incur are also significant if the vessels are inactive or fall into a state of disrepair.
- Fundamentals: Financial statements and quarterly earnings reports for an oil company can provide insight into the viability of the business as an investment. The company’s earnings per share (EPS), price-to-earnings ratio and dividend are directly related to its share price.
- Leases and contracts: Leases and contracts of oil companies are usually entered into with oil producers and refiners located in various countries around the world. Geopolitical events in these countries could be important factors that could directly affect the bottom line and the share price of the company.
Are oil tanker stocks a good investment?
The short answer to this question probably isn’t. The oil trade and global dependence on fossil fuels for energy are gradually ending as newer and more environmentally sustainable technologies increasingly replace oil as an energy source. The oil stocks listed above have also produced dismal long-term results for investors in recent years, one example being NAT which has seen an 85% decline over the past decade. Although oil tanker stocks are not a good long-term investment, they can be an attractive vehicle for short-term speculation and day trading due to their volatility.
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