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Tanker operator warns on oversupply of ships

Financial Times -- Major ship deliveries over the next two years could threaten the balance of the market for crude oil tankers, the sector’s biggest operator has warned as the earning power of tankers slumps.

Frontline, whose largest shareholder is John Fredriksen, the Norwegian-born tycoon, also warned in a results statement on Friday that third-quarter earnings would be “materially below” the $81.3m net income on $356m revenue achieved between April and June this year.

The daily rates earned by crude oil tankers have collapsed since the end of June, forcing many operators to lay ships up out of use, as the segment has become the latest area of shipping to be hit by a combination of weak demand and excess ships.

Frontline is particularly exposed to movements in rates because, like other companies

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Submitted Aug 27, 2010 By: Turk182

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52MPG Champion Author Dayton Posts:4,909 Points:1,277,505 Joined:Apr 2006	Message Posted: Aug 28, 2010 9:29:33 AM Ignore 52MPG Report Abuse Another economic fact of life is making its self known.
gasforus Champion Author Michigan Posts:6,779 Points:1,727,615 Joined:Dec 2005	Message Posted: Aug 28, 2010 8:09:37 AM Ignore gasforus Report Abuse All because demand is still down.
ex911 Champion Author San Jose Posts:6,844 Points:1,339,770 Joined:Apr 2005	Message Posted: Aug 28, 2010 8:06:55 AM Ignore ex911 Report Abuse now they can't blame delivery cost for pump price increases
ERO Champion Author Milwaukee Posts:19,082 Points:3,216,060 Joined:Feb 2003	Message Posted: Aug 28, 2010 6:56:36 AM Ignore ERO Report Abuse It's a trap!
Vette1967 Champion Author Albany Posts:3,654 Points:815,950 Joined:Jun 2009	Message Posted: Aug 28, 2010 2:05:30 AM Ignore Vette1967 Report Abuse Even the tankers are feeling the effects of this recession.
72_Monte Champion Author Twin Cities Posts:5,428 Points:1,531,955 Joined:Aug 2005	Message Posted: Aug 28, 2010 12:56:36 AM Ignore 72_Monte Report Abuse Tanks.
OnTheWater Champion Author Orange County Posts:2,123 Points:622,380 Joined:Nov 2009	Message Posted: Aug 27, 2010 11:55:50 PM Ignore OnTheWater Report Abuse What does this mean for gas prices??????????
mtnlion Champion Author Utah Posts:4,464 Points:569,045 Joined:Jul 2009	Message Posted: Aug 27, 2010 11:52:23 PM Ignore mtnlion Report Abuse gas prices should be lower
packards42 Champion Author Washington Posts:4,239 Points:717,270 Joined:Feb 2005	Message Posted: Aug 27, 2010 11:50:28 PM Ignore packards42 Report Abuse Well, it look like supply and demand is working, everywhere except at the pump.
TBONE3 Champion Author Pennsylvania Posts:6,388 Points:1,510,745 Joined:Mar 2005	Message Posted: Aug 27, 2010 11:44:40 PM Ignore TBONE3 Report Abuse There is always a new excuse for the "poor" oil industry. Ships laying up with cargo on board usually are paid for the time they loose until off loaded. I would imagine this would apply to tankers as well.
traindude Champion Author Virginia Beach Posts:5,614 Points:1,245,430 Joined:Jun 2007	Message Posted: Aug 27, 2010 11:43:27 PM Ignore traindude Report Abuse tough ship, welcome to the recession
fullauto Champion Author Reading Posts:3,312 Points:1,067,550 Joined:Apr 2008	Message Posted: Aug 27, 2010 11:41:20 PM Ignore fullauto Report Abuse ?
spheremaker1 All-Star Author Arizona Posts:797 Points:822,165 Joined:May 2006	Message Posted: Aug 27, 2010 11:39:41 PM Ignore spheremaker1 Report Abuse no.. lower crude because there is less demand... unless OPEC decides to illegally withhold product from the market...
rxman1 Champion Author Toledo Posts:7,001 Points:1,397,270 Joined:Nov 2007	Message Posted: Aug 27, 2010 11:35:17 PM Ignore rxman1 Report Abuse FT.com articles are only available to registered users and subscribers.
MidNJ Champion Author New Jersey Posts:4,628 Points:739,595 Joined:Sep 2009	Message Posted: Aug 27, 2010 11:34:16 PM Ignore MidNJ Report Abuse FordF250, you posted, "Let's get off oil. If you agree, it starts by driving fuel efficent vehicles. What are your thoughts?
10k Champion Author North Carolina Posts:16,595 Points:1,787,870 Joined:May 2006	Message Posted: Aug 27, 2010 11:30:55 PM Ignore 10k Report Abuse and i guess this means higher prices ??..
Bus561 Champion Author Lexington Posts:14,076 Points:2,753,105 Joined:May 2004	Message Posted: Aug 27, 2010 11:27:26 PM Ignore Bus561 Report Abuse That is their problem and I could care less about it.
FordF2502001 Champion Author Mississippi Posts:5,678 Points:1,154,720 Joined:Sep 2008	Message Posted: Aug 27, 2010 11:20:45 PM Ignore FordF2502001 Report Abuse Let's get off oil.
bbreff Champion Author Atlanta Posts:7,647 Points:2,129,065 Joined:Jun 2005	Message Posted: Aug 27, 2010 11:17:59 PM Ignore bbreff Report Abuse This is obvous with all the ships sitting offshore waiting to unload.
ssect8 Champion Author Hartford Posts:5,614 Points:1,663,705 Joined:Jun 2006	Message Posted: Aug 27, 2010 11:17:47 PM Ignore ssect8 Report Abuse Just another excuse to raise gas prices.
915Chief Champion Author San Diego Posts:6,061 Points:1,203,245 Joined:Aug 2008	Message Posted: Aug 27, 2010 11:17:37 PM Ignore 915Chief Report Abuse Be glad you have jobs....
RockCity Champion Author Denver Posts:5,305 Points:963,360 Joined:Mar 2009	Message Posted: Aug 27, 2010 11:16:50 PM Ignore RockCity Report Abuse Norweigian tycoon says it all, supply & demand is a joke.
faulkc05 All-Star Author Atlanta Posts:562 Points:193,540 Joined:Jun 2008	Message Posted: Aug 27, 2010 11:12:45 PM Ignore faulkc05 Report Abuse Here we go again.
vulcan96 Champion Author Ohio Posts:21,169 Points:2,639,595 Joined:Aug 2004	Message Posted: Aug 27, 2010 11:12:23 PM Ignore vulcan96 Report Abuse Bigwaynef posted :Of course it's Bush's fault, they just reported that it was Bush's fault that President Clinton and Monica were caught having sex thats funny, but its the speculators/manipulators...GREED
TheSicilian Champion Author Jacksonville Posts:3,026 Points:1,003,300 Joined:Feb 2009	Message Posted: Aug 27, 2010 11:12:16 PM Ignore TheSicilian Report Abuse how does this effect gas prices
Blue_Cruzer Champion Author Lexington Posts:5,152 Points:1,202,725 Joined:Mar 2007	Message Posted: Aug 27, 2010 11:11:56 PM Ignore Blue_Cruzer Report Abuse So why haven't pump prices dropped?
Bigwaynef Champion Author South Carolina Posts:7,657 Points:1,613,960 Joined:Dec 2006	Message Posted: Aug 27, 2010 11:09:13 PM Ignore Bigwaynef Report Abuse Of course it's Bush's fault, they just reported that it was Bush's fault that President Clinton and Monica were caught having sex...
CobraLeader Champion Author New Jersey Posts:267,902 Points:1,200,750 Joined:Apr 2007	Message Posted: Aug 27, 2010 11:08:55 PM Ignore CobraLeader Report Abuse ... Was down at the Delaware Bay recently. There are MANY fully laden tankers at anchor ... ... There is NO SHORTAGE! ... ... Do let them BS you! ...
TFowler513 Champion Author Memphis Posts:2,582 Points:978,110 Joined:Mar 2008	Message Posted: Aug 27, 2010 11:07:38 PM Ignore TFowler513 Report Abuse Time to start recycling the excess tin cans!!!
NO_SWEAT Champion Author Toronto Posts:2,308 Points:673,045 Joined:Jul 2008	Message Posted: Aug 27, 2010 11:07:26 PM Ignore NO_SWEAT Report Abuse "The daily rates earned by crude oil tankers have collapsed since the end of June ... " - O.K., they will get back to work if they are 'LOW-BALLED' and we can have the price of oil collapse again. Duh!
tedjm1 Champion Author New York Posts:3,540 Points:389,685 Joined:Dec 2006	Message Posted: Aug 27, 2010 11:06:26 PM Ignore tedjm1 Report Abuse Why does this not have a large impact on gas prices?
REKEY Champion Author South Carolina Posts:6,211 Points:1,234,555 Joined:May 2008	Message Posted: Aug 27, 2010 11:06:21 PM Ignore REKEY Report Abuse ahhhhhhhhhhhhhh
NavyStore Champion Author Seattle Posts:3,768 Points:1,659,690 Joined:Aug 2005	Message Posted: Aug 27, 2010 11:04:07 PM Ignore NavyStore Report Abuse FlynFool - don't be a putz. This is an issue that has been coming about for the last decade, so this isn't surprising to anyone who advocates for the transition away from foreign, or fossil, fuels.
FlyNFool Champion Author South Carolina Posts:5,955 Points:1,222,280 Joined:Aug 2008	Message Posted: Aug 27, 2010 10:56:28 PM Ignore FlyNFool Report Abuse Maybe Obama can fix the situation, he knows all!
serrog Champion Author Nova Scotia Posts:3,303 Points:1,052,935 Joined:Oct 2008	Message Posted: Aug 27, 2010 10:53:46 PM Ignore serrog Report Abuse Obama the shipping magnate?? Get serious.
marvin42 Sophomore Author Salt Lake City Posts:113 Points:297,510 Joined:Nov 2009	Message Posted: Aug 27, 2010 10:51:40 PM Ignore marvin42 Report Abuse Interesting how everything is Obama's fault for some people....
TRAIN RIDER Champion Author San Bernardino Posts:6,768 Points:2,298,985 Joined:Oct 2004	Message Posted: Aug 27, 2010 10:50:39 PM Ignore TRAIN RIDER Report Abuse WHY DOESN'T THE PRICE OF GAS COLLAPSE?
brbaritone Champion Author Virginia Posts:1,069 Points:1,270,505 Joined:Jan 2007	Message Posted: Aug 27, 2010 10:46:58 PM Ignore brbaritone Report Abuse "The daily rates earned by crude oil tankers have collapsed since the end of June ... " - O.K., so why doesn't the price of oil collapse?
1cheapgasin Champion Author Indianapolis Posts:3,145 Points:744,590 Joined:Jul 2009	Message Posted: Aug 27, 2010 10:46:04 PM Ignore 1cheapgasin Report Abuse Come on Obama, bail them out- we can afford it!!!!!!!!!!!
altima2008 Champion Author Philadelphia Posts:5,793 Points:1,272,305 Joined:Apr 2008	Message Posted: Aug 27, 2010 10:40:22 PM Ignore altima2008 Report Abuse We can thank bush and nobama for this unique problem.
Jeeputtputt Champion Author Michigan Posts:1,388 Points:341,520 Joined:Aug 2009	Message Posted: Aug 27, 2010 10:39:51 PM Ignore Jeeputtputt Report Abuse should not use tankers for storage!!
LuckyTahoeGirl Champion Author Nevada Posts:2,604 Points:479,570 Joined:Jul 2010	Message Posted: Aug 27, 2010 10:16:22 PM Ignore LuckyTahoeGirl Report Abuse wow
jb107 Champion Author New Jersey Posts:7,218 Points:2,155,660 Joined:Sep 2005	Message Posted: Aug 27, 2010 10:15:36 PM Ignore jb107 Report Abuse To many ships present a problem.
Lukus Champion Author Halifax Posts:6,026 Points:1,216,610 Joined:Nov 2007	Message Posted: Aug 27, 2010 10:07:57 PM Ignore Lukus Report Abuse They should be taking the single wall ships out of the system.
RENEGADEGAS Champion Author Missouri Posts:12,054 Points:1,127,180 Joined:Jul 2008	Message Posted: Aug 27, 2010 9:58:06 PM Ignore RENEGADEGAS Report Abuse Thanks hussien.
mstearno Champion Author Dayton Posts:5,867 Points:1,286,185 Joined:Jan 2008	Message Posted: Aug 27, 2010 9:54:11 PM Ignore mstearno Report Abuse wow this is big news
Chris46 Champion Author Dayton Posts:17,140 Points:1,673,495 Joined:Sep 2005	Message Posted: Aug 27, 2010 9:50:13 PM Ignore Chris46 Report Abuse All John is worried about is money.
zee10 Veteran Author California Posts:362 Points:47,200 Joined:Mar 2010	Message Posted: Aug 27, 2010 9:48:50 PM Ignore zee10 Report Abuse Wasteful.
OnEmptyMO Champion Author St. Louis Posts:3,440 Points:1,044,640 Joined:Mar 2008	Message Posted: Aug 27, 2010 9:47:31 PM Ignore OnEmptyMO Report Abuse I guess we blame the President for this too!
sit Champion Author Cleveland Posts:2,891 Points:1,470,690 Joined:Feb 2006	Message Posted: Aug 27, 2010 9:41:16 PM Ignore sit Report Abuse Bad economony.... no big need for gas. Thanks washington.