Shares of crude-oil shipper Nordic American Tankers (NAT) rose more than 4% Thursday after the company has announced highly profitable bookings for the first quarter.
“We would like to inform you that over the last few weeks, we have fixed a string of our vessels for voyages extending well into the New Year and the first quarter of 2020,” Nordic American CEO Herbjorn Hansson wrote in a letter to shareholders.
“These spot voyages are generating in the range of $35,000 per day to $80,000 per day per ship. This confirms that the tanker market has turned and is now stronger than ever.” The company’s operating costs are only about $8,000 per day per ship, Hansson said.
Average daily charter rates for very large crude carriers soared to record highs of more than $300,000 per day in October, according to Reuters. The surge came after the U.S. imposed sanctions on China’s Cosco Shipping Energy Transportation. Cosco is one of the world’s biggest tanker owners and a large carrier of oil for China.
The increase in shipping rates is one factor limiting U.S. crude oil exports.
As for Nordic American, 21 of its 23 suezmax ships are in the spot voyage market, the company said. Hansson is optimistic about the future too. “The broad based strength in the market place for our tankers sends an encouraging promise for the time to come,” he wrote in the letter to shareholders.
Nordic American’s shares stood at $5.07 on Thursday, up 4.42%. They have jumped 153.5% so far this year.