2023-04-03 10:43:32 ET
Shares in Frontline ( NYSE: FRO ) and other oil tanker companies plunge in Monday's trading in reaction to the surprise OPEC+ production cut that could provide another spark for inflation and weigh on the world economy.
Analysts say OPEC's move is negative for tankers and will lead to substantially lower demand after the cuts kick in May 1.
Among tanker stocks: Frontline ( FRO ) -8.7% , Euronav ( EURN ) -4.4% , Teekay Tankers ( TNK ) -9.5% , Nordic American Tankers ( NYSE: NAT ) -10.8% , International Seaways ( INSW ) -7.1% , Scorpio Tankers ( STNG ) -3.8% , Tsakos Energy Navigation ( TNP ) -6.7% , Torm ( TRMD ) -8.9% , DHT Holdings ( DHT ) -8.9% , SFL Corp. ( SFL ) -0.6% .
"This aggressive cut will lead to a significant decline in oil stockpiles in just a few months, bolstering the oil market outlook," analysts at Jefferies predicted.
Before the OPEC+ announcement, Clarksons Research had forecast the crude trade would grow 7% in ton-miles and oil products to grow by 11% this year.
Nordic American Tankers' ( NAT ) fleet continues to benefit from Russian oil disruptions and low global fleet growth, which has allowed tanker rates to stay "higher for longer," Macrotips Trading writes in an analysis posted on Seeking Alpha .
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Oil tanker stocks slammed as OPEC+ production cut sparks global demand fears