January 9, 2015
Thanks to Daniel Carlson of
American Sands Energy for this tanker idea.
If you like it, Friday's pause in tanker gains in the stock market might be the time to step into the group. This also is a good way to gauge when oil prices' decline will ease or turn.
Dan is the chief financial officer at
AMSE, an oil sands project in Utah.
This is not a fresh idea. Wait. It was when Dan gave it to me at the start of this week!
We are seeing several articles about the theme: rising oil (and liquid natural gas) supplies worldwide lead to great "spot" storage of oil in tankers. They then float here and there as financial types -- hedge funds and such -- arbitrage their leased tankers against the future price of the oil in their tanker bellies.
Some of the shipping companies have seen their rates triple since December. Another benefit of the lowest crude oil prices (Brent and West Texas Intermediate) in five years is the drop in the price of "bunker" fuel used to propel these tankers.
So.
Oil tankers. They make more money as the price goes down and volume goes up. Here is a list of 10
oil tankers.
The
contango dynamic with oil futures prices makes this compelling for speculative investors. Contango is when near term prices are well below forward delivery; traders stock up and use tankers as floating storage before making future delivery. Additionally, the market has a miniscule net increase in volume coming on line in 2015.
Dan tells us that a
contango on this arbitrage angle can result in as many as 100 million barrels of oil stored in tankers.
I believe daily consumption of oil worldwide is about 90 million barrels. Correct me if I am mistaken, TCR family. At any rate, storing all those barrels would take about 100 so-called
Suezmax ships.
"All of this has led to the rates being the best since 2008 with no end in sight. Check out the charts of NNA, DHT, NAT, TNP. I own NNA and TNP," Dan Carlson says.
"NNA in particular looks compelling to the point where they yield close to 6% in dividend and just announced a SHARE REPURCHASE. Imagine that; business growing, 6% yield and enough free cash to take 10% of the float out of the market."
Dan concludes that the group will have analyst upgrades and earnings revisions trending higher through the end of Q1.
Thanks for writing the column today, Dan, who is a member of our TCR family and lives up the road here in northern California.
This gives me time to take a closer look at net smelter revenue (royalty) timing for Ian Ball's
Abitibi Royalties -- imminent I hear, RZZ and GZZ in Canada and ATBYF in USA.
Here is what Ian James Ball, president of Abitibi Royalties, tells me today. This is fresh information and actionable.
"We still have the 5 pending drill holes from the Odyssey North discovery (at Malartic CHL). We expect to receive those results shortly from
Agnico Eagle and
Yamana. This is going to give us a real sense of the discovery's potential based on the placement of the holes (as we discussed on the phone - going deeper, east and west)."
On the royalty: "Agnico Eagle and Yamana have not provided an update, (but) we expect our royalty income from the Goudlie zone to begin shortly."
Abitibi Royalty shares and those of parent Golden Valley Mines, are performing well. RZZ is the one to purchase here, if you can find a few thousand shares without moving the price.
So. Dan's tanker plan also gives me time to get an update on what is going on at
Colt Resources in Portugal (and the Middle East). GTP in Canada. Nikolas Perrault there tends to publish news on Fridays.
Finally, I expect more buying of
Angkor Gold shares today and into the next three weeks. Fresh investors looking at the properties, plus our own TCR tour of Cambodia, will spur buying.
Thanks to InvestorIntel, Stockhouse.com, The Gold Report (Streetwise) and others for running our ANK material this week. This is our shot at what we call the
Phnom Phenom: a SE Asia wonder that could become the best performing gold mining, royalty and prospecting stock globally in the next two years, or less.
If you are in the area, please visit us at the
Cambridge House Resource Show Monday January 19 at 1 p.m. where I will be discussing for 30 minutes why Angkor Gold's prospecting, assays, joint venture mine (royalty) with an India group and its China partners will propel Cambodia and this Grand Prairie, Alberta, company, to historic heights.
THE CALANDRA REPORT: Subscribe
Now $129 yearly!
See: a thomcalandra.com home for our expanding TCR family.
THE CALANDRA REPORT
$129 yearly: Does Not Recur
THE CALANDRA REPORT
$129: Will Recur Yearly
Thom Calandra & TCR are researchers and investors. They are not registered investment advisers, nor do they wish to be. The research and material they offer to subscribers are meant as editorial opinion.