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Nordic American Benefiting from Exceptionally Strong Tanker Market

Streetwise Reports
0 Comments|5 days ago

Shares of Nordic American Tankers are trading 16.5% higher today setting a 52-week intraday high stock price as the company reported great demand for its Suezmax oil tankers.

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Hamilton, Bermuda-headquartered international tanker company Nordic American Tankers Ltd. (NAT:NYSE) announced in a letter to shareholders and investors that the anticipated upswing in the tanker market has come to fruition. The release referenced that just two weeks ago the company advised that there would be strong market improvement for the firm's Suezmax tankers.

The company wrote in the release, "We have for a long time informed you of this anticipated upswing in the tanker market...Seeing is believing and if anyone had doubts, last week, the international shipbroking firm of Clarkson Platou Research reported the largest week-on-week increase in the history of their freight index. From Thursday to Friday last week, reported Suezmax rates jumped 60% on the day and 400% on the month!"

Nordic American states in the report that "its uniform fleet of 23 Suezmax tankers have 21 units trading in the open spot market, ready to benefit from strengthening freights." The firm indicates that presently "the Suezmax spot market is reported to about $68,000/day, and rising and the NAT operating costs are about $8,000/day per ship."

The company noted that "a seasonal upturn was already in the making. However, the additional combination of increased demand from refineries around the world ramping up their production to supply low sulphur fuels for 2020 and reduced supply of new vessels are important structural factors." Nordic American also advised that the temporary uncertainty around the Saudi Arabian oil production has created additional demand pressure. The company believes that the market bottomed out during 2018 and the industry will see further improvement going forward.

The company indicated that Q3/19 earnings for the period ending September 30, 2019, will be released on November 25, 2019, prior to the market open on that day. The company advised that Q3/19 results will not be much different from Q2/19 results.

The company remains excited about the prospects for the rest of fiscal year 2019 and further down the road. The company believes that it will remain in a very strong position with 21 of its 23 Suezmaxes in the spot market. This positioning will allow NAT to continue to directly benefit from the exceptional run up in Suezmax freight rates.

Nordic American Tankers is an international tanker company, which was incorporated in Hamilton, Bermuda in 1995. The company has an active trading fleet of 23 vessels, of which 21 are presently deployed in the spot market. The vessels in the company's fleet are homogenous and interchangeable and the Suezmax tankers each can carry over 1 million barrels of oil.

Nordic American Tankers began the day with a market capitalization of about $439.2 million and approximately 142.6 million shares outstanding . The stock trades in a 52-week price range of $1.66-3.60/share. This morning, NAT shares opened at $3.18 (+$0.10, +3.25%) over yesterday's $3.08 closing price. The stock has traded today between $3.07 and $3.60/share, setting a 52-week high intraday price and at present is trading at $3.59 (+0.51, 16.56%).


Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.


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