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TWST: Please start with an overview of your coverage in the marine
transportation space.
Mr. Nokta: I cover three main sectors - the oil tankers, the dry bulk carriers,
and the container ships. Right now, the main focus is on the oil tanker and
product tanker side. That is where most of the companies listed here in the US
operate, and increasingly, there have been more and more companies going public
in the dry bulk arena. I cover roughly 20 companies. About 12 or 13 are tankers,
six or seven are dry bulk, and one or two are containers. TWST: Let's start with the tanker side since it's the largest part of the
coverage. What has gone on from a business perspective year to date?
Mr. Nokta: Actually, it has been a really good business year to date. It has
been much better than people expected, and it comes down to the fact that we had
a pretty weird summer. Oil prices were typically going up in the face of
seasonal downturn and demand. In the second and third quarter, there's usually
not as much demand because the heating oil season is over, but we saw oil prices
going up because of high security concerns about Israel and Lebanon and the UN-
Iran standoff. More and more people got nervous and antsy, and as oil prices
were going up, people were looking to import more to make sure they could get a
hold of the cargo. At the same time, they were securing tankers further ahead of
schedule than they needed to or were used to doing in the past, so tanker rates
went dramatically upward in a time when demand is always going the opposite way.
So rates this summer were very, very good, and there are a bunch of other things
you had that were bolstered by the fact that Nigerian production has been
offline and the Shell (RDS.A) and BP (BP) pipelines have been sabotaged, and
they service the US and Western Europe. Those two areas have had to actually go
further away to the Middle East to make up that difference that was lost -
between 500,000 and 800,000 barrels a day. We had more and more ships having to
transit further than they usually did. Instead of a 10-day voyage from West
Africa to the US Atlantic, you now had a 30-day one-way voyage from the Arabian
Gulf to the US, so that really tightened the amount of ships available. Rates
have obviously responded favorably, so it has been pretty good, much better than
last year for the first nine or 10 months.
Tickers included in this excerpt: DRYS, EGLE, GSTL, QMAR, SSW
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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