GMR third quarter profit falls 54%

GMR Announces Third Quarter Results

Oct. 31
PRNewswire-FirstCall

General Maritime Corporation today reported its financial results for the three and nine months ended September 30, 2007.

Financial Review: 2007 Third Quarter

The Company had net income of $10.9 million, or $0.36 basic and $0.35 diluted earnings per share, for the three months ended September 30, 2007 compared to net income of $24.0 million, or $0.78 basic and $0.76 diluted earnings per share, for the three months ended September 30, 2006. The decrease in net income was principally the result of lower voyage revenues attributable to a generally lower rate environment in the third quarter of 2007. The impact of lower rates on the Company was mitigated by the Company's increased time charter coverage at rates above current spot rates. Results for the 2007 period also reflected higher interest expense due to increased borrowings to fund our $15.00 special dividend in March 2007 and increased off-hire days due to longer then anticipated drydockings and one accelerated drydocking in the third quarter of 2007.

Peter C. Georgiopoulos, Chairman, Chief Executive Officer and President, commented, "During the third quarter of 2007, we continued to benefit from the strategic decision we made over a year ago to place a significant portion of our fleet on accretive time charters. The considerable success we have had in this important area is testimony to our strong reputation in the industry and unrelenting focus on effectively managing the Company's assets through the shipping cycles. Complementing our solid results for the third quarter, we declared a third quarter dividend of $0.50 per share, our third consecutive dividend under the Company's fixed annual dividend of $2.00 per share. Including this quarterly dividend and the $15 special dividend we paid on March 23, 2007, General Maritime has distributed dividends of $24.78 per share to shareholders since 2005. With 70% time charter coverage for our fleet on the water, we have contracted revenues of $191.8 million for 2008, which positions the Company well for our $2.00 fixed dividend target while maintaining upside potential to benefit from any rate increases in the future."

Included in net income of $10.9 million are a $3.4 million unrealized non- cash gain associated with the change in fair value of our freight derivative as well as a $1.3 million gain associated with monthly cash settlements of our freight derivative, both of which are included in Other (income) expense.

Net voyage revenue, which is gross voyage revenues minus voyage expenses unique to a specific voyage (including port, canal and fuel costs), decreased 12.2% to $49.1 million for the three months ended September 30, 2007 compared to $55.9 million for the three months ended September 30, 2006. EBITDA for the three months ended September 30, 2007 was $31.0 million compared to $34.0 million for the three months ended September 30, 2006 (please see below for a reconciliation of EBITDA to net income). Net cash provided by operating activities was $18.5 million for the three months ended September 30, 2007 compared to $15.6 million for the prior year period.

The average daily time charter equivalent, or TCE, rates obtained by the Company's fleet decreased by 15.9% to $30,176 per day for the three months ended September 30, 2007 from $35,886 for the prior year period. The Company's average rates for vessels on spot charters decreased by 51.9% to $18,246 for the three months ended September 30, 2007 compared to $37,994 for the prior year period.

Total vessel operating expenses, which are direct vessel expenses and general and administrative expenses, increased 7.1% to $22.6 million for the three months ended September 30, 2007 from $21.0 million for the three months ended September 30, 2006. Direct vessel operating expenses increased 15.5% to $12.7 million from $11.0 million, while general and administrative expenses remained flat at $9.9 for the same periods. The average size of General Maritime's fleet increased 7.8% to 19.4 vessels in the third quarter of 2007 from 18 vessels in the prior year period. On a daily basis, direct vessel operating expenses increased 7.2% to $7,125 during the quarter ended September 30, 2007 compared to $6,645 for the prior year period. This increase can be attributed to cost associated with bringing the technical management of two of our Aframax vessels in-house and the write off of certain expenses reflecting insurance claim deductibles as well as increased premiums reflecting the increased value of our fleet.

Financial Review: Nine Months 2007

Net income was $39.4 million or $1.29 basic and $1.25 diluted earnings per share, for the nine months ended September 30, 2007 compared to $134.4 million, or $4.24 basic and $4.13 diluted earnings per share, for the nine months ended September 30, 2006. Net voyage revenues decreased 16.0% to $161.9 million for the nine months ended September 30, 2007 compared to $192.9 million for the nine months ended September 30, 2006. EBITDA was $91.6 million for the nine months ended September 30, 2007 compared to $165.0 million for the nine months ended September 30, 2006. Net cash provided by operating activities was $79.6 million for the nine months ended September 30, 2007 compared to $135.4 million for the prior year period. TCE rates obtained by the Company's fleet decreased 4.4% to $33,002 per day for the nine months ended September 30, 2007 from $34,508 for the prior year period. Total vessel operating expenses remained relatively flat at $70.3 million for the nine months ended September 30, 2007 compared to $70.7 million for the prior year period, and daily direct vessel operating expenses rose 9.3% to $6,777 for the nine month period ending September 30, 2007 from $6,203 from the prior year period.

OSG Q3 Profit Falls 71%

Overseas Shipholding Third-Quarter Profit Falls 71%
By Todd Zeranski
Oct. 29 (Bloomberg)

Overseas Shipholding Group, the largest U.S.-based oil tanker owner, said third-quarter profit fell 71 percent as the company was paid less for oil deliveries.

Net income declined to $26.6 million, or 83 cents a share, from $90.8 million, or $2.29, a year earlier, the New York-based company said in a statement today. The average estimate of 12 analysts surveyed by Bloomberg was 70 cents a share. Revenue rose 4.3 percent to $277.2 million.

Shipping rates have fallen 19 percent this year, according to the Baltic Dirty Tanker Index. The decline is due at least partly to ship supply outpacing crude-oil demand. While the size of the world fleet expanded 3.8 percent, demand increased 1.7 percent, according to the International Energy Agency.

``They're going to have a tough couple of quarters, this and next,'' Natasha Boyden, a Cantor Fitzgerald LP analyst, who has a ``buy'' rating on the stock, said. ``The rates haven't rebounded like we thought they would. Weather hasn't been helpful, and that's usually the biggest driver.''

Overseas Shipholding was unchanged at $69.21 in New York Stock Exchange composite trading. The stock has risen 23 percent this year.

Profit included a gain from sales of vessels of $1.5 million, or 5 cents a share. The year-ago quarter had a gain of $15.8 million, or 39 cents.

Oil is up 53 percent in 2007 and reached a record $93.80 a barrel in New York Mercantile Exchange trading today.

Tanker Fleet

The world fleet will increase by as much as 32 percent during the next five years, estimates Lloyd's Register-Fairplay, the company that assigns ship registration numbers.

``We hope we would see asset values come down, as rates have been depressed for several quarters,'' Boyden said. Overseas Shipholding ``would like to see that, because they would be able to buy.''

Last month, Overseas Shipping said it would add four Suezmax carriers, which can each transport 1 million barrels of oil, to its fleet. The company owned or operated 51 crude-oil tankers at the end of the quarter, including 20 very large crude carriers, or VLCCs, which can carry 2 million barrels of oil.

The company has booked 44 percent of the fourth quarter for its VLCCs at an average rate of $25,500 a day. For its Aframax tankers, which can transport 600,000 barrels of oil, it has booked 13 percent of the quarter at a spot charter rate of $17,000 a day.

VLCC Fleet

The company's VLCCs operate mainly out of the Persian Gulf on routes to Asia and the U.S. The tanker owner said it was paid an average of $34,802 a day for its VLCCs in the quarter, a 50 percent decrease. Its break-even point for VLCCs is $17,400.

Its Aframax tankers earned an average spot rate of $24,614, from $34,952 a day a year earlier, a 30 percent decline.

Overseas Shipholding's U.S.-flag fleet ships crude oil and refined products between U.S. ports under the Jones Act, a 1920 law that requires commercial vessels operated between U.S. ports to be built in the U.S., crewed by Americans and owned by an American company.

Revenue for its U.S. fleet nearly tripled to $53.8 million.

Tanker Fleets

Company Fleets [Draft]

625 pixels - 10 columns - 8pt (reset font)

Company	ticker	vessels	dwt*	VLCC	Suezmax	Aframax	Panamax	Product	LNG
Teekay	TK	159	7.73	1	25	46	0	30	7
Frontline [2]	FRO	59	14.70	39	20	0	0	0	0
Overseas	OSG	108	8.15	20	0	20	11	34	0
Ship Finance [2]	SFL	37	9.60	27	10	0	0	0	0
Tsakos	TNP	43	3.04	3	10	8	0	21	1
General Maritime	GMR	19	2.15	0	9	10	0	0	0
Top Tankers	TOPT	23	1.95	0	13	0	0	10	0
Knightsbridge	VLCCF	5	1.50	5	0	0	0	0	0
Double Hull [1]	DHT	8	1.37	3	1	4	0	0	0
Nordic American	-----	12	1.80	0	12	0	0	0	0
Arlington	ATB	9	7.00	2	0	0	2	5	0
-----	-----	-----	---	--	--	--	--	--	--
Euronav	[Eur]	32	dwt	15	15	2	0	0	0
MISC (Malaysia)	-----	45	dwt	8	0	31	0	6	23
Total	-----	vessels	dwt	96	126	86	13	100	31

updated October 2007
[1] DHT tankers chartered in from OSG
[2] Many ships are in both FRO and SFL fleets, SFL charters to FRO.

* million deadweight tons. This number is an estimate based only on the crude tankers in the fleets. Product carriers, LNG carriers, and any other vessels are not included. 300,000 dwt per VLCC; 150,000 dwt per Suezmax; 80,000 dwt per Aframax; and 50,000 dwt per Panamax - regardless of actual individual tanker specifications. This number should only be used as an estimate of total capacity.

Arlington Tankers Slips To Loss In Q3

Arlington Tankers Slips To Loss In Q3; Declares Dividend
October 23, 2007
(RTTNews)

Arlington Tankers Ltd. reported third quarter net loss of $41 thousand, compared to a profit of $37 thousand in the earlier year quarter. On a per share basis, company reported breakeven, flat with last year.
On a non-GAAP basis, net income for the quarter was $4.91 million or $0.32 per share, in comparison with $5.23 million or $0.34 per share in the prior year quarter.

On average, 3 analysts polled by First Call/Thomson Financial expected the company to report earnings of $0.32 per share for the quarter.

Quarterly total revenue decreased to $17.51 million from $17.60 million in the year ago quarter. Two Wall Street analysts projected revenues of $17.62 million for the quarter.

In addition, the company Board of Directors has declared a cash dividend of $0.59 per share. The dividend is payable on November 6, 2007 to shareholders of record at the close of business on November 2, 2007.

The Company expects to announce its next dividend on January 29, 2008 and to pay that dividend on or about February 12, 2008.

Euronav NV loses $23 million

Euronav NV (EURN BB): Belgium's only publicly traded oil- tanker owner said it had a third-quarter loss of $23.3 million on lower rates and rising marine-fuel costs. Euronav said it remains ``cautious'' on the outlook for the rest of the year and the start of 2008. The shares declined 10 cents, or 0.5 percent, to 20.71 euros.

Bloomberg Oct. 24th

Analysts Trash Tanker Stocks

Frontline, Teekay Crash Nears Amid Tanker Glut, Crude
By Alaric Nightingale and Todd Zeranski
Oct. 22 (Bloomberg)

The record increase in oil prices and the unprecedented number of new tankers transporting crude is a stock market crash waiting to happen.

That, at least, is the growing consensus among analysts who say the widening gap between West Texas Intermediate crude and the rate for supertankers shipping Middle East oil to Asia means industry titans Frontline Ltd., Overseas Shipholding Group Inc. and Teekay Corp. have unsustainable valuations.

The Bloomberg Tanker Index has risen 44 percent in the past two years, even as freight rates sank 49 percent. The price of marine fuel, the biggest cost for shipowners, has advanced 44 percent in that time, reaching a record $446.50 a metric ton on Oct. 17. The number of ships available is close to a record.

``It doesn't look good at all,'' said Andreas Vergottis, who helps manage $1.2 billion at Isle of Man-based Tufton Oceanic Ltd., the world's biggest hedge fund dedicated to shipping. ``We've got a wall of worry and a wall of new buildings flooding the market ahead of us.'' He said the stocks are 30 percent overvalued.

Frontline, the world's biggest operator of supertankers, reached a record low of 3.80 kroner in December 1998. The stock this year has gained 30 percent and was trading 2.1 percent lower at 233 kroner as of 12:03 p.m. in Oslo. The gain has helped make Chairman John Fredriksen into Norway's richest man, with a fortune that Forbes magazine estimates at $7 billion.

Too Many Ships

The looming decline for tanker stocks is a legacy of the biggest tanker construction program in history. Teekay, Frontline and Overseas Shipholding in 2004 earned a combined $2.2 billion, triple the level of a year earlier, because of a jump in world oil demand. They used that profit to help order 522 tankers from builders including Hyundai Heavy Industries Co. and Samsung Heavy Industries Co.

The size of the oil tanker fleet expanded 3.8 percent this year, overwhelming the 1.7 percent increase in crude oil demand estimated by the International Energy Agency. The fleet will increase by as much as 32 percent during the next five years, estimates Lloyd's Register-Fairplay, the company that assigns ship registration numbers.

Tankers are being built at the fastest rate ever, according to Clarkson Plc, the world's largest shipbroker, which began collecting industry data in 1852.

Tankers capable of hauling 1.2 billion barrels of crude, equal to about two weeks of global oil consumption, will enter service in the six years that end in 2009, according to Clarkson. The total is 1 percent higher than the previous record, from the 1970s.

Straight to Scrapyards

Ship demand at that time slowed, and newly built tankers were sent straight to demolition, said Per Mansson, a shipbroker for Nor Ocean Stockholm AB, a former second mate and executive at Frontline before Fredriksen bought the company. Some tankers hauled one cargo from Asian shipyards to northwest Europe, only to be laid up in the fjords of Norway, he said.

``It got so bad that, on one voyage from Sweden to Venezuela, we turned the engine off and went with the current down to the Caribbean because fuel was so expensive,'' said Mansson, 55. ``We got a telegram from Exxon to go at 7 knots, so we just floated down.''

The Bloomberg Tanker Index has gained 32 percent this year, outpacing a 5.8 percent increase in the Standard & Poor's 500 Index, and a 6.4 percent drop in U.S. government 10-year bonds. Oil is up 41 percent and reached a record $90.07 a barrel in New York Mercantile Exchange trading on Oct. 19.

Teekay has appreciated 32 percent this year to $57.72 on the New York Stock Exchange, valuing the Bahamas-based company at $4.3 billion. Overseas Shipholding, based in New York, has advanced 27 percent to $71.56.

Demolitions

Shares of Frontline are heading for an 11 percent decline, according to Henrik With, the DnB Nor Markets analyst whose advice on Frontline gave clients a 91 percent gain in the past year. Teekay may decline 26 percent, he forecasts. Among all analysts tracked by Bloomberg, at least 70 percent say the two stocks aren't worth buying.

Frontline Chief Executive Officer Bjoern Sjaastad in an interview said oil carriers will be sold and converted to haul bulk commodities, easing the ship surplus. Also, the speed of demolitions ``will go a lot faster than many people think,'' bolstering freight rates, he said.

Teekay spokeswoman Alana Duffy said the company can't comment before an earnings release at the end of the month. Overseas Shipholding spokeswoman Jen Schlueter said CEO Morten Arntzen wasn't immediately available for an interview.

Time Charters

Shipowners can protect against a drop in the single-voyage market by leasing vessels on so-called time charter contracts that can last months or years, while paying a fixed amount.

About 40 percent of Frontline's ships had such protection for 2007 and 2008, according to an Aug. 22 statement. Seventeen percent of Teekay's 111 carriers had such contracts, while none of Overseas Shipholding Group's biggest carriers had such deals.

Teekay protects itself against increases in the cost of marine fuel. Frontline and Overseas Shipholding don't. The industry's pricing mechanism, known as Worldscale, is updated once a year to reflect changing fuel prices.

Demand for single-voyage charters is ``stuck in a rut'' because the soaring price of oil is squeezing refiners and discouraging purchases, said Omar Nokta, an analyst at Dahlman Rose & Co. in New York. He advises investors hold their Frontline shares.

Losing Money

Refineries are losing 63 cents on each barrel they process in Europe, compared with a profit of $7.86 in May, because crude costs are rising faster than prices for gasoline and diesel, according to data compiled by Bloomberg.

``All this weakness is stemming from refineries not being in the market,'' said Nokta, whose call on Frontline during the past year led to a 35 percent profit for investors.

Analysts value shipping stocks in relation to the cost of second-hand tankers. From December 2003 through July 2007, those ship values more than doubled, according to data from the London- based Baltic Exchange. Since then, ship prices have dipped, exchange data show.

``Asset values will fall and dividend payments must be cut,'' said DnB Nor Markets' With. ``Too much fleet capacity coming on stream will put pressure on earnings from 2008 to 2010.''

Freight Rates

Falling freight rates and record fuel costs have given shipowners their longest string of losses in five years, according to Citigroup Inc., the third-largest lender to the shipping industry. So-called very large crude carriers, which transport about 2 million barrels, are losing more than $13,000 a day in the market for day-to-day charters. Shipowners are spending more on fuel and debt payments than they collect in rent.

Suezmax vessels, the biggest tankers that can navigate Egypt's Suez canal while full, are losing more than $10,000 a day. Owners of aframaxes, 600,000-barrel carriers that usually haul crude within the same continent, are losing about $13,000 a day, Citigroup estimates.

Thirty of the largest tankers may be sold and converted into carriers for grain, coal and iron ore, markets where freight rates are at a record high, Frontline's Sjaastad said.

``For the next 15 months, there isn't going to be substantial additions to the fleet, you'll have depletions going to dry bulk,'' said Dahlman Rose's Nokta. ``If you have the demand push, then they'll be able to absorb the vessels. Demand would keep a natural floor.''

China's economy is growing at almost 12 percent a year and India's by 9.3 percent, spurring demand for oil, steel, iron ore and coal.

No Cargoes

Some 50 supertankers have failed to find cargoes in the past month, and vessels will compete for consignments in November, extending declines for owners, forecasts Paris-based shipbroker Barry Rogliano Salles.

Relief may not come until 2010, when the United Nations' shipping agency, the International Maritime Organization, adopts a ban on single-hull tankers, those at greatest risk of spilling oil in the event of an accident. Once the policy takes full force five years later, the only tankers plying the oceans must have two steel hulls.

``Everything now is about what happens between today and 2010,'' says Ole Stenhagen, an analyst at SEB Enskilda in Oslo. ``We are in for a real dip in rates and a rough environment.''

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=anj25lHh6K4E

Aframax Rates Rise

Caribbean Tanker Rate Increases on Competition From Europe
By Todd Zeranski
Oct. 18 (Bloomberg)

The rate to transport oil from the Caribbean advanced, spurred by higher prices in European shipping markets.

``Mediterranean activity has increased, so some owners are moving there,'' said Mike Jedlicke, a broker at Dietze & Associates LLC in Wilton, Connecticut. ``That's thinning out'' the number of available vessels, straining Caribbean supply.

Stronger Aframax bookings in the Mediterranean and the Black Sea forces Caribbean-area charterers to pay higher rates to keep vessels in the region.

The average Aframax rate advanced 15 points, or 11 percent, to Worldscale 155. WS 155 is equal to about $20,325 a day, after expenses such as fuel and port fees.

The rate fell to WS 92.5 on Sept. 11, the lowest since 2001, according to Bloomberg data. Rates increased 22 percent yesterday and are up 48 percent this week.

Malaysia's Eagle Anaheim Nereo is scheduled to reach its Houston destination on Oct. 21, according to Bloomberg data.

The Caribbean is the world's third-largest Aframax-tanker market after the Mediterranean and Southeast Asia. An Aframax is the most common tanker used to move oil in the region.

Persian Gulf Tanker Rates May Rise as Fuel Prices Crimp Income
By Alaric Nightingale
Oct. 18 (Bloomberg)

The cost of shipping Middle East crude to Asia, the world's busiest market for supertankers, may rise for an eighth day as soaring refueling prices continue to crimp income from rentals.

Record marine fuel, or bunker, costs mean some owners, who rented extra tankers at fixed prices anticipating rising demand in the northern hemisphere winter, may be losing about $30,000 a day when they lease out those ships in the day-to-day, or spot market, Charlie Fowle, a director at London-based shipbroker Galbraith's Ltd., said by phone today.

``The bunker factor at the moment is dramatic,'' Fowle said. ``Just to get the same return, owners need 10 to 20 percent more'' from the oil companies who book their ships.

Hyundai Merchant Marine, a South Korean shipowner, hired the tanker Hebei Spirit at a rate of 59 Worldscale points, according to a report from Athens-based Optima Shipbrokers today. That's 3.5 percent above the London-based Baltic Exchange's benchmark assessment of 57.03 Worldscale points for cargoes to Asia.

Hebei Spirit should normally cost less to hire than the benchmark because it's fitted with one steel hull separating its cargo from the ocean. The exchange's assessment also includes carriers with two steel hulls that cut the risk of an oil spill in the event of an accident and usually have better engines.

At 57.03 Worldscale points, owners of double-hulled very large crude carriers, or VLCCs, can earn about $20,024 a day on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg marine fuel prices.

A week ago, the same rate of 57.03 points would have earned $3,500 a day more when the cost of bunkers was 9 percent cheaper.

Bloomberg Roundup October 13th

Black Sea, Mediterranean Tanker Rates May Rise on Winter Demand
By Alaric Nightingale
Oct. 12 (Bloomberg)

The cost of shipping 80,000-ton cargoes of crude oil from Black Sea and Mediterranean ports to refineries in southern Europe may rise next week as bookings increase before the northern hemisphere winter.

Demand for so-called aframax tankers has been ``busy'' for the past several days, Francesco Sparviero, a broker at Nolarma Tankers SRL in Genoa, said in an e-mailed note today. The extra demand may continue into next week as refineries buy crude to turn into winter fuels such as heating oil, he added.

Increased bookings have cut the number of tankers competing for cargoes and enabled owners to negotiate higher rental rates, Sparviero said. The London-based Baltic Exchange's benchmark rate for shipments across the Mediterranean gained 28 percent to 120.45 Wordscale points in the four days to Oct. 11.

Reduced daylight hours are starting to delay vessels in two Turkish straits that ships exiting and entering the Black Sea must navigate. The average waiting time now is between two and three days going into the Black Sea and about two days to exit, according to Sparviero.

Delays at the two waterways normally rise in winter, reducing the supply of Russian crude to world markets and cutting tanker supply because the ships are unavailable for hire for longer periods.

A rental rate of 120.45 Worldscale points equates to $18,613 a day, according to a formula from Oslo-based shipbroker RS Platou AS and Bloomberg ship-fuel prices. Teekay Shipping Corp., the world's biggest dedicated oil-tanker company and operator of aframaxes, needs about $15,000 a day to break even.

Black Sea, Africa Oil-Tanker Rates May Slump on Surplus Ships
By Alaric Nightingale
Oct. 5 (Bloomberg)

The cost of shipping 1 million-barrel consignments of crude oil from ports in the Black Sea and west Africa may extend two weeks of declines as a surplus of tankers compete for cargoes.

There is a ``long'' list of tankers available to meet ``very little'' demand, Luis Bernar, a tanker broker for Medco Shipbrokers in Madrid, said in an e-mailed note today.

``Everyone is hoping that the last quarter of the year will improve but I'm starting to think this is wishful thinking,'' Bernar said. Rental rates will only improve if there are weather- related delays and cargo demand accelerates, he said.

Rentals from the two ports, the biggest for 1 million-barrel tankers globally, began falling on Sept. 21, with rates from the Black Sea dropping 17 percent and those from west African ports losing 12 percent, according to benchmark data from the London- based Baltic Exchange.

Black Sea hire rates declined to 81.96 points and west African bookings slipped to 82.62 points, according to the most- recent prices from the exchange.

Based on a rental rate of 81.96 Worldscale points, operators of double-hull suezmax vessels earn about $15,508 a day on the 12-day round trip between the Black Sea port of Novorossiisk and Augusta, Italy, according to a formula by R.S. Platou, an Oslo- based shipbroker, and Bloomberg bunker prices.

At 82.62 points, a west African cargo would pay $16,579 a day, according to the same formula.

Frontline Ltd., the world's biggest supertanker operator, said Aug. 22 it needs $22,000 to break even on each of its suezmaxes.

Route Rates 2 - Test

route	class	size	Days	WS	TCE - equiv	breakeven	Date
TD1	VLCC	280 kmt	xxxx	xxxx	$xx,000	xx,000	xxx
TD2	VLCC	260 kmt	xxxx	xxxx	$xx,000		xxx
TD3	VLCC	250 kmt	38 days	51.64	$17,662	$30,000	Oct. 11th
TD4	VLCC	260 kmt	xxxx	xxxx	$xx,000	xx,000	xxx
TD5	Suezmax	130 kmt	xxxx	xxxx	$xx,000	xx,000	xxx
TD6	Suezmax	135 kmt	xxxx	xxxx	$xx,000	xx,000	xxx
TD7	Aframax	80 kmt	xxxx	xxxx	$xx,000	xx,000	xxx
TD8	Aframax	80 kmt	??	116.00	xxx	xxx	Oct. 11th
TD9	Aframax	70 kmt	??	102.50	$6,500	$15,700	Oct. 11th
TD10	Panamax	50 kmt	xxxx	xxxx	$xx,000	xx,000	xxx
TD11	Aframax	80 kmt	??	120.45	$18,613	$15,000	Oct. 11th
TD12	Panamax	55 kmt	xxxx	xxxx	$xx,000	xx,000	xxx
TD14	Aframax	80 kmt	xxxx	110.00	xxx	xxx	Oct. 11th

Backwardation and Contango

Some time ago, a reader asked -

"The crude market seems to be trading back in (at least a mild) backwardation, which means lower inventories. How do you see this impacting on World Scale points/BDTI?"

My view is that the global supply chain for oil is in many cases up to 6 months long, so I typically try to average monthly and weekly figures into periods that are at least 3 months long. Short term fluctuations are just noise. Tanker rates are a matter of supply and demand. There is increasingly less oil being exported and more tankers in all segments entering the market. Even in the face of positive economic growth and supposedly higher demand for oil - the oil simply isn't there to move and their is an increasing glut of tankers. I would expect rates to drop, but there is hardly any room for them to drop, they are already so low.



The only mystery to me is why the valuations for the tanker companies/stocks continue to rise. The investors and the market must see something I'm missing, but I've yet to find what that is.

Here is a good discussion of the backwardation / contango issue :
Speculation and fundamentals in oil prices

Bloomberg Roundup October 11th

Asian Aframax Rate Falls on Limited Cargoes, Ship Supply Gain
By Katherine Espina
Oct. 11 (Bloomberg)

Asian rates for oil tankers that can carry 80,000 metric tons fell for a third day on limited cargoes from the Middle East, causing an oversupply of vessels.

The aframax rate for transporting oil from Kuwait to Singapore, the world's fourth-busiest route for such vessels, dropped 0.08 percent to Worldscale 115.83 yesterday, according to data from the London-based Baltic Exchange. Shipping a ton of fuel on the route costs $11.96, according to Bloomberg data.

``There could be some more room for rates to go down given there are plenty of vessels and little activity,'' Takeshi Ando, a shipbroker at Matsui & Co., said by phone from Tokyo.

Aframax rates have declined 7 percent in the past four weeks, as holidays in China slowed chartering and higher fuel oil prices in Fujairah, the Middle East's largest bunker port, discouraged shipments to the Far East.

Only two aframax tankers capable of moving 215,415 tons of fuel are scheduled to arrive in Singapore next week compared with this week's four, which are able to transport 412,305 tons, Bloomberg data showed. About five to 10 aframaxes are waiting for employment in Singapore this week, shipbrokers said.

Rising supply of new vessels may also contribute to declining rates. More than 240 aframax tankers are on order for the next five years, adding to the 728 units at the end of 2006, France-based shipbroker Barry Rogliano Salles said in its review of the tanker market.

Southeast Asia is the world's second-busiest aframax market, after the Mediterranean. The Caribbean is the third busiest.

Other freight rates. Source: Baltic Exchange:

Route               Tons    Rate   Change   Carrier
Kuwait-Singapore    80,000  115.83  -0.08%  Aframax
Indonesia-Japan     80,000  110.00  -4.35%  Aframax
Persian Gulf-Japan  75,000  113.75  +0.92%  Oil Product Tanker
Singapore-Japan     30,000  202.00  -0.04%  Oil Product Tanker
Middle East-Japan   55,000  161.73  +4.5%   Oil Product Tanker

Persian-Gulf Tanker Costs May Resume Decline on Glut of Ships
By Alaric Nightingale
Oct. 11 (Bloomberg)

The cost of shipping Middle East crude to Asia, which advanced for the first time in 10 days yesterday, may resume its decline as a glut of ships will counter increased demand for cargo from Saudi Arabia.

The London-based Baltic Exchange's key ship-rental rate rose as refinery officials said Dahran-based Saudi Aramco will supply Asian customers with full crude-oil volumes for the first time in a year from November. The company previously cut volumes by 9-10 percent. The Organization of Petroleum Exporting Countries has pledged to boost output from next month by 500,000 barrels a day.

``I don't see the market picking up,'' said Mathieu Philippe, a tanker broker in Dubai at Paris-based Barry Rogliano Salles. ``There are plenty of ships around. I don't think these announcements will have any effect for the next few days.''

Fifty-seven tankers that so far haven't been hired are able to reach ports by Oct. 31, according to a Barry Rogliano report, meaning oil-company officials will have a surplus of vessels to use when November bookings get under way.

The Baltic Exchange's rental rate, used in negotiations between shipowners and oil companies and to settle freight hedging contracts, advanced 2.3 percent to 51.64 Worldscale points yesterday, its first gain since Sept. 27.

At 51.64 Worldscale points, owners of double-hulled very large crude carriers, or VLCCs, can earn about $17,662 a day on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg marine fuel oil prices.

Frontline Ltd., the world's biggest VLCC operator, said Aug. 22 it needs $30,000 a day to break even on each of its supertankers.

Caribbean Tanker Rate Rises as U.S. Crude Oil Inventory Falls
By Todd Zeranski
Oct. 11 (Bloomberg)

The rate to transport oil from the Caribbean rose as U.S. oil inventories declined and refineries increased production.

The Caribbean is the world's third-largest Aframax-tanker market after the Mediterranean and Southeast Asia. An Aframax is the most common tanker used to move oil in the region.

The average Aframax rate rose 2.5 points, or 2.5 percent, to Worldscale 102.5. WS 102.5 is equal to about $6,500 a day, after expenses such as fuel and port fees, according to Poten & Partners.

Houston-based broker Lone Star, R.S. Platou reported a rate of WS 105. Poten & Partners reported WS 100.

The rate fell to WS 92.5 on Sept. 11, the lowest since 2001, according to Bloomberg data.

General Maritime Corp., the second-largest U.S. tanker owner behind Overseas Shipholding Group Inc., said last year it had a break-even rate for its fleet of about $15,700 per day. The New York-based company operates many of its vessels in the Caribbean.

BDTI - Baltic Dirty Tanker Index Routes

---	From	To	Size	Class
TD1	MEG	USG	280,000mt	VLCC
TD2	MEG	Singapore	260,000mt	VLCC
TD3	MEG	Japan	250,000mt	VLCC
TD4	WAF	USG	260,000mt	VLCC
TD5	WAF	USAC	130,000mt	Suezmax
TD6	Black Sea	Mediterranean	135,000mt	Suezmax
TD7	North Sea	Eur Continent	80,000mt	Aframax
TD8	Kuwait	Singapore	80,000mt	Aframax
TD9	Caribbean	USG	70,000mt	Aframax
TD10	Caribbean	USAC	50,000mt	Panamax
TD11	Mediterranean	Mediterranean	80,000mt	Aframax
TD12	Antwerp	Houston	55,000mt	Panamax
TD14	Indonesia	Japan	80,000mt	Aframax

Persian Gulf Tanker Rates May Extend Slump

Persian Gulf Tanker Rates May Extend Slump Amid Glut of Vessels
By Alaric Nightingale
Oct. 8 (Bloomberg)

The cost of shipping Middle East crude to Asia, the world's busiest market for supertankers, may fall for a seventh day as a surplus of ships compete for cargoes.

Refineries still need to arrange shipping for about 11 more cargoes this month while 74 very large crude carriers, or VLCCs, can reach the region's ports by Oct. 31, according to a report today from Paris-based shipbroker Barry Rogliano Salles.

``I'm somewhat worried,'' Per Mansson, a tanker broker at Nor Ocean Stockholm AB, said in an e-mailed note today. ``We are already knocking on the November door and rates are very low. We might be in for a bad couple of years.''

Exxon Mobil Corp., the world's biggest oil company, hired the tanker Shinyo Navigator at a rate of 52.5 Worldscale points, according to a report today from Athens-based Optima Shipbrokers. That's 3 percent below the London-based Baltic Exchange's Oct. 5 assessment of 54.16 points for voyages to Asia.

Shinyo Navigator is fitted with two steel hulls separating its cargo tanks from the ocean. Such vessels usually cost more to hire than the benchmark because they cut the risk of an oil spill in the event of an accident. The exchange's price also takes single-hull tankers into account.

Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.

Negotiating Rates

Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.

At 54.16 Worldscale points, owners of double-hulled very large crude carriers, or VLCCs, can earn about $20,197 a day on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg marine fuel prices.

Black Sea, Africa Oil-Tanker Rates May Slump on Surplus Ships
By Alaric Nightingale
Oct. 5 (Bloomberg)

The cost of shipping 1 million-barrel consignments of crude oil from ports in the Black Sea and west Africa may extend two weeks of declines as a surplus of tankers compete for cargoes.

There is a ``long'' list of tankers available to meet ``very little'' demand, Luis Bernar, a tanker broker for Medco Shipbrokers in Madrid, said in an e-mailed note today.

``Everyone is hoping that the last quarter of the year will improve but I'm starting to think this is wishful thinking,'' Bernar said. Rental rates will only improve if there are weather- related delays and cargo demand accelerates, he said.

Rentals from the two ports, the biggest for 1 million-barrel tankers globally, began falling on Sept. 21, with rates from the Black Sea dropping 17 percent and those from west African ports losing 12 percent, according to benchmark data from the London- based Baltic Exchange.

Black Sea hire rates declined to 81.96 points and west African bookings slipped to 82.62 points, according to the most- recent prices from the exchange.

Based on a rental rate of 81.96 Worldscale points, operators of double-hull suezmax vessels earn about $15,508 a day on the 12-day round trip between the Black Sea port of Novorossiisk and Augusta, Italy, according to a formula by R.S. Platou, an Oslo- based shipbroker, and Bloomberg bunker prices.

At 82.62 points, a west African cargo would pay $16,579 a day, according to the same formula.

Frontline Ltd., the world's biggest supertanker operator, said Aug. 22 it needs $22,000 to break even on each of its suezmaxes.

Dividend plays for volatile times

Dividend plays for volatile times
By Jim Jubak
9/28/2007

[...] As always, the question is how far to reach for yield. I can certainly find stocks with strong current cash flows and high yields but where the strength of future cash flows seem very closely connected to the fortunes of the U.S. economy. For example, Nordic American Tanker Shipping (NAT) pays a dividend of 12.04%, but the company has just warned investors that the third quarter looks soft. According to the company, jitters in the financial markets have led to softness in spot rates for tankers.

I don't know if that's the reason, in which case the problem will pass quickly, or whether the weakness reflects some deeper trend in the global economy. But given that 11 out of the company's 12 tankers operate in the spot market, instead of being under long-term contracts, the company's business is very leveraged to the rate of growth in the global economy. Since I know that I don't know the rate of global economic growth in the next year with any certainty, reaching for that much
yield is too risky right now [...]