- Are the oil tankers stocks trading at higher prices? Certainly, not.
- The best part about the oil tankers is that their stocks don’t have to go up.
- The dividends alone will generate so much return that stocks can stay at the current levels forever.
- The oil tankers are going to be required for storage as long as the production stays higher than demand.
- Everybody seems to agree that at some point the party in the oil tankers will end, the discrepancy is the timing.
Mariusz Skonieczny writes for Seeking Alpha about the oil tanker market. He makes it a point that there is no bearish case for oil tankers.
Laugh all the way to the bank
The floating storage is the only game in town. Right now, the oil tankers have a monopoly on the oil storage. With every passing day, more oil tankers are being taken out of the fleet to store oil. This pushes the rates for moving and storing oil up. Then, the demand for storage increases even higher while the supply of vessels keeps shrinking.
What’s next after quarantine release
At last, after the quarantine period the demand for oil will increase. But, the oil in the storing vessels will still be there. It will not magically disappear. It will take a long time to work off the excess.
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Source: Seeking Alpha
