Please ensure Javascript is enabled for purposes of website accessibility

Why Nordic American Tankers Stock Just Jumped 9%

By Rich Smith – Nov 28, 2018 at 2:45PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The world's awash in oil, and someone's going to need to haul it.

What happened

Shares of sometimes topsy, sometimes turvy oil shipper Nordic American Tankers Limited (NAT 3.37%) are on the upswing again today, rising 9% as of 2:20 p.m. EST -- and yet there seems to be no Nordic American Tankers-specific news to explain what is up, or why Nordic American is up.

Red-painted tanker foredeck

This tanker is painted red, but Nordic Oil Tankers stock is shining green today. Image source: Getty Images.

So what

So what could explain the sudden popularity of Nordic American Tankers stock? I have three theories -- none necessarily conflicting with the others.

The first comes from Nordic American's recent earnings report, in which management cited a recent spike in suezmax charter rates to as high as $50,000 a day. With pricing so strong, Nordic American said it will soon be earning "much higher rates" on its ships -- certainly good news for the stock.

Of course, that's also old news, as earnings came out two weeks ago. More recently, we see that crude oil tanker rates have been holding up nicely on the Baltic Dirty Tanker Index, and rose another 4 points to 1,131 this morning .

Finally, the U.S. Energy Information Administration announced  today that U.S. crude stockpiles rose for a 10th straight day. "Production is hitting new highs," reports, and the more oil producers pump, the more demand there is for tankers to ship it.

Now what

And of course, as we all learned in Econ 101, the more demand there is for a service like oil transport, the higher the price a service provider like Nordic American Tankers will be able to charge. That's good news for the company's stock -- and for Nordic American Tankers investors.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nordic American Tankers Limited Stock Quote
Nordic American Tankers Limited
$2.76 (3.37%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.