NAT - Nordic American Tankers: A Taste Of Peak Oil Demand And It's Not Nice

• Nordic American Tankers reduced their dividends done to the bare-bones early in 2021 following a very rough end to 2020.
• During the fourth quarter of 2020 they saw their earnings and operating cash flow turn negative.
• Whilst this downturn is due to the oil market rebalancing, the bigger implication is that it provides an insight into their medium to long-term future.
• One day oil production will peak and thus demand for oil tankers will terminally decline and likely cause significant financial pain since the industry lacks the ability to coordinate.
• Whilst they might make a suitable short-term contrarian rebound investment, given the cloudy long-term outlook, I believe that a neutral rating is appropriate.

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