What happened
Shares of refined petroleum products transporter Scorpio Tankers (NYSE: STNG) climbed sharply in early Monday trading and remain up a healthy 10% as of 1:05 p.m. EST. There doesn't appear to be any Scorpio-specific news to explain the surge in share price, so ... why is Scorpio going up?
This tanker is painted red -- but Scorpio Tankers stock is glowing green today. Image source: Getty Images.
So what
That's an excellent question, and while I can't be 100% certain of the answer, I suspect it has something to do with the fact that the Baltic Clean Tanker Index (BCTI), which tracks the rates tanker companies are charging for oil-and-gas shipments across the oceans, rose steadily in the latter half of last week.
While most of us were consumed with the idea of consuming turkeys (and consumption in general), the BCTI climbed from 645 Monday to close at 660 Friday, a 2.3% gain for the week. Seeing as Scorpio's profits are directly tied to the rates it can charge for transporting petroleum products, and those rates are tied to the BCTI, it's probably no coincidence that once Americans got back to trading this week, they decided to trade Scorpio Tankers stock up.
Now what
Will that continue in the final week of the month, the final month of the year, and the New Year as well? That's very hard to say. I would, however, point out that at a current reading of 660, the BCTI is currently sitting almost exactly where it sat at the end of last year (656 on Dec. 31, 2017). Viewed in that context, essentially zero movement in the index over the course of the year probably isn't the best reason to get excited.
