A Small Sliver Lining to the Gulf Spill


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While there's little question that the Gulf oil spill will, in all likelihood, go onto the Top10 list of enviromental disasters, there may well be a silver lining for some investors.

Those who hold tanker stocks in their portfolio might well benefit according an article on Bloomberg.com. Quoting Jens Martin Jensen, CEO of Frontline's management unit, there's a very good possibilty that rules banning single hull tankers may be tightened.

Oil tankers with single hulls are being phased out, this year, with a total ban in effect by 2015. This will have the effect of cutting current tonnage by 11% (presently, the global fleet of supertankers numbers 522, according to the article).

Here, in the U.S., the Oil Oil Pollution Act of 1990, currently allows single hull tankers to offload at LOOP (Louisiana Offshore Oil Port), or at dedicated unloading areas out at sea, until 2015.

Suezmax forward freight agreements for May have jumped by 10%, to 128 Worldscale points, and could rise even more, as tankers are diverted around the slick, leading to longer shipping times.

Source: Bloomberg

Disclosure: Long: TEEKAY Offshore ( TOO ), TEEKAY Tankers ( TNK ), DHT Maritime ( DHT )

See also The Time to Love Research In Motion Is Now on seekingalpha.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
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