Short-Term Tanker Outlook Cloudy

Tanker stocks, notoriously volatile, may face a choppy rates market in the coming months.
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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) - Get Report

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) - Get Report

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) - Get Report

came through with another of its heavyweight dividend distributions, jacking its pay out by 140% to 60 cents a share.

The mixed results follow

earnings misses and sharp stock selloffs

for both

Overseas Shipholding

(OSG) - Get Report


General Maritime


earlier in the month.

Tanker stocks were mostly lower Monday, with shares of bellwether


(FRO) - Get Report

losing 1.3% to $33.96. The company is now scheduled to report its first quarter numbers on May 20.

Teekay, meanwhile, was retreating 2.8% to $24.18; Nordic American was down 0.7% to $30.45; and OSG was declining 2% to $42.89.

-- Written by Scott Eden in New York


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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.