There's plenty of room for disagreement over the widely divergent economic sources the two Presidential candidates cited in their debate last night. What isn't debatable is something they both found agreeable: U.S. shale oil production is strong and is reducing this country's dependence on imported oil. The shale boom blessing may drive an unanticipated effect on the fortunes of some ocean carriers. Demand for oil tankers to service U.S. imports will probably suffer. The entire shipping industry has been on a newbuild frenzy since the Great Recession went into hiatus in 2009 but that affection for new hulls has been most visible in the containerized shipping sector. Petroleum carriers will soon find out just how much an overcommitment to new hulls will cost them.
I've been tracking a couple of oil carriers off and on for about three years but I never went long their stocks. If the whole sector suffers, the carriers with the least debt and fewest newbuild commitments may merit my investment. If the renewed global recession (yes, it's here already) crashes crude oil prices, the weakest ocean carriers may look for acquirers.
Full disclosure: No positions in the shipping sector at this time.
I've been tracking a couple of oil carriers off and on for about three years but I never went long their stocks. If the whole sector suffers, the carriers with the least debt and fewest newbuild commitments may merit my investment. If the renewed global recession (yes, it's here already) crashes crude oil prices, the weakest ocean carriers may look for acquirers.
Full disclosure: No positions in the shipping sector at this time.
