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Frontline Slides, Despite Supertanker Demand, as Falling Oil Hits Energy Stocks 01/07 12:09 PM



12:09 PM Eastern Standard Time, 01/07/2009 (MidnightTrader) -- Supertanker owner Frontline Ltd. (FRO:$31.4300,$-1.6100,-4.87%) is off nearly 5% at mid-day, even though it sees rising demand chartered tankers to stockpile crude, as falling oil prices take a toll on energy-related stocks.
Crude for February delivery moved down $3.58, or 7.4%, to about $45 a barrel on the New York Mercantile Exchange, after U.S. crude inventories were higher than expected. Oil was down 3.6% before the inventories data and had topped $50 a barrel yesterday, for the first time in five weeks.
The AMEX Oil an Gas Indexes are down 2.7% and 2.8% respectively and the Philadelphia Oil Service Sector Index is down 3.87% with major producers such as Chevron Corp. (CVX:$75.22,00$-2.13,00-2.75%) , down 2.8%, Exxon Mobil Corp. (XOM:$78.86,00$-1.44,00-1.79%) , down 1.87% and ConocoPhillips (COP:$54.05,00$-1.63,00-2.93%) down 3%.
Frontline said about 25 supertankers are already chartered for storage and the company has inquiries for up to 10 more, Jens Martin Jensen, interim chief executive officer of the company's management unit, told Bloomberg.
Traders want buy crude now and sell it for delivery later, profiting from a futures market situation called contango where prices are higher as the year progresses.
Price: 31.42, Change: -1.62, Percent Change: -4.90
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