NEW YORK (TheStreet) -- The short-term picture for tanker stocks has grown a little muddy.
First and foremost, the widely watched fixture or cargo count -- the number of oil tanker ships booked each month to transport oil from the "Arabian Gulf" -- will possibly not reach the expected century mark for May, which could weigh on shipping rates going forward, some market watchers and investors say. ("Arabian Gulf" is tanker-industry shorthand for the Persion Gulf-Arabian Peninsula region.)
The number of fixtures in an average month is about 95, but in March and April a surge in demand for Very Large Crude Carriers pushed the count to around 105. Different shipping-industry watchers tally the number in different ways, but as of now several bearish prognosticators are calling for 95 fixtures in May.
Also, on Friday, oil futures prices continued to decline, falling to $73 a barrel as market players priced in an expected weakening in demand for crude. The conventional wisdom now seems to be that a global economic recovery will be held in check, at least to some degree, by Europe's sovereign debt crisis. Contagion also remains a concern.The uncertainty comes after a bullish run in tanker stocks. Earlier in the year, the VLCC market roared in to life, with rates surging. Then, in early May, as the BP (BP) oil spill has expanded in severity, some market watchers said tanker rates would strengthen as a result. Earnings reports from the tanker sector over the last two weeks have not exactly clarified matters. Teekay Corp. (TK) on Thursday morning said it swung to a loss in the first quarter despite an increase in cargo rates from a year ago, while the company's chief, Bjorn Moller, warned that volatility would likely characterize the tanker market all through this year. And on Monday, fan favorite Nordic American Tanker (NAT) came through with another of its heavyweight dividend distributions, jacking its pay out by 140% to 60 cents a share.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV