Discover and read the best of Twitter Threads about #imo2020

Most recents (14)

In the 4 years pre-covid delivered ~$6 in positive earnings to shareholders. To respond to covid, sold their hydrogen plants and cut their dividend, reporting a GAAP $3.23 gain and a non-GAAP $3.19 loss. The dividend cut alone saves $35m/quarter, or $1/share per year.
Last year was anticipated to deliver dramatically higher earnings due to much higher margins in its coker units due to market structure changes from #IMO2020. Obviously covid changed that.
Unless the covid has structurally and permanent changed the oil market, and demand is low forever, I believe will return to profitability and deliver positive earnings once again. Shares purchased at these levels could be a highly profitable trade. Buy at max fear.
Read 3 tweets
I'd like to share some thoughts about #tankers $EURN $STNG $FRO $DHT $TNK $INSW $ASC $TRMD $OET & the market in general.

It's counter-productive at best & delusional at worst to guide your investment decisions (I'm not talking about short-term trading) based on the market 1/n
whose inefficiency you seek to exploit.

Either you see a market inefficiency and move to exploit it or the market is pricing the asset efficiently and thus you move on (or accept market results).

From a short-term trading perspective things are different. You seek to 2/n
ride the market's ups & downs & thus you must constantly be tuned to the market's fluctuations & try to see what comes next.

If you're investing, volatility isn't risk. Your risks lie on business performance.

You buy what you think the market will like in a year or more 3/n
Read 13 tweets
1 yr ago Cleaves had $18.4 PT on $TNK (RS adjusted). At the time, $TNK had many upcoming maturities and had not experienced the Q4-Q2 rate bonanza. After 5c loss in Q219 (better than expectations), Cleaves raised PT to $28.8. Now Cleaves PT is $10. Here's why I find this odd...
$TNK earned $2.37 in Q4. $TNK debt decreased by 15% in Q4. This was a blowout bonanza noone expected. The company also refinanced 31 vessels and pushed 63% of its remaining debt maturities out four years. 4 Suezmax tankers were sold, plus the cash. $4.5 per share went to debt.
In Q1, $TNK earned another $3.17 per share, and reduced net debt by another 20%.

$5.54 in net earnings in two quarters! Debt repayment profiles pushed out 4 years! Only another $29M is due in 2020! Between Q319 and end April 2020 net debt was reduced by nearly $10 per share!
Read 10 tweets
I'm back! I needed a break, and going forward I'll be less active than before. I have still followed tankers closely.

Here are my current thoughts on the market, and as a bonus a few charts from the platform I'm working on...

First, in shipping, it's the stuff you don't see coming that makes or breaks a quarter. Think of the last year. COSCO sanctions, COVID19, #IMO2020 stocking...when these events were in view it was already too late, they'd already changed the market...
Now on the horizon we have:

- Crew changes
- Dry docking
- Venezuela sanctions
- Second wave of infections
- OPEC+ cuts tapering off

And as always, a good underlying supply future, an order book that remains low, and a wave of tankers hitting the second hand market (Hin Leong)
Read 9 tweets
If you bought tankers at the bottom of the last cycle (2002-2003), 4-5x in dividends what you paid for your shares. What happened?

- Order book bottomed 1998
- Economic expansion
- Environmental regulations around tankers

The current tanker order book is lowest since 1998.
Now, I don't think we see rates go up and away for the rest of the year. They might be terrible! They could be horrifically bad for the next two years! But that will keep the order book low. There are TWO sets of environmental regulations as well!
The last boom was supported by China's rapid modernization and growing standard of living. Nearly half the planet's population still lives on less than $10 a day.

India, Latin America, Southeast Asia, and Africa are where ALL the population growth is.
Read 8 tweets
1/3 Hey @IMOHQ we've been thinking more about your response. Truth is, you're saying a lot of words, but all we're seeing is:
@IMOHQ The oceans are under threat from these systems now. Let us know when you’ve banned scrubbers. #CloseTheScrubberLoophole
@IMOHQ 3/3 To be clear, we're talking about MARPOL Annex VI, Regulation 4.1 - Scrubbers just don’t meet the standard. #CloseTheScrubberLoophole #IMO2020
Read 3 tweets
📣On Jan 1st, a huge new international law came into effect, essentially ending the use of high-sulfur heavy fuel oil in shipping. *But ships are still bypassing the law with ‘emissions cheat systems’ - aka ‘scrubbers’.*
2. This new law from @IMOHQ should have an enormous impact on the shipping industry, as most ships still burn one of the dirtiest fuels on earth. But ships can cheat the system by installing ‘scrubbers,’ and keep using heavy fuel oil through a big loophole in the law.
@IMOHQ 3. How do scrubbers work? Most ships are installing the type that uses seawater to ‘wash’ sulfur from the ship exhaust. This contaminated wastewater is then just discharged into the ocean, turning air pollution into water pollution instead.
Read 6 tweets
Colombia's oil is significant to US
1- The oil industry in Colombia has perfected replacing & fixing oil pipelines more than any other country in the world. It experienced more attacks on pipelines than any other country…
2- Although Colombia has experience with insurgency and attacks on pipelines for decades, large demonstrations are something different. However, oil fields are relatively away from population centers
Map is relatively old.
3- Just like in Iraq and Iran, oil workers are from the local population, and might go on strike, crippling production and exports. A large number of Venezuelan petroleum engineers, geologists & others work in Colombia. They will get stuck in this political divide in Colombia
Read 10 tweets
Prediction I've gambled my money on:

Institutional funds will realize that the high and consistent price volatility of Diesel in comparison to the price of natural gas will make $wprt a valuable company in a frothy market.
The switch to compressed natural gas vehicles because of the price delta between natural gas and diesel is eminent for US fleets.

there's 100K gas stations.
there's ~1.68K natural gas stations.
The #IMO2020 and Trump as President may have a deep impact and drive diesel prices to be more volatile.

Even with futures, a better bet is to not take risk, and to simply convert your fleet to compressed natural gas or just buy vehicles that run on it if your routes comply^
Read 11 tweets
Thread on the impact of attacks on #Abqaiq #oil complex in the E. province in Saudi Arabia:
1- It is difficult at this stage to assess the impact of the attacks. While no details, we have to be mindful of the gagging orders & Saudi laws governing reporting, videos, and pictures.
2-Will the attacks lead to lower crude oil exports? We do not know at this stage. Will they lower production? We do not know either. What do we know? Majority of Saudi oil exports goes through Abqaiq facilities.
3-What do we know? Redundancy is common in Saudi oil facilities, especially #Abqaiq. While costly, redundancy helps in case of technical problems or attacks similar to what we have seen today. The existence of backup means the impact on production and exports is limited.
Read 7 tweets
1/Here is why you [the market] and the @IEA have got it wrong on #IMO2020.
This is what a 'little disruption' may entail....
@IEA 2/ #IMO2020 crunch time for #oil product balances coming in Dec/Jan not Apr20 (as per IEA). No @IMOHQ derogations/no delays. Market is telling us so as prompt HSFO cracks collapse.
@IEA @IMOHQ 3/ #IMO2020 compliance is being way underestimated by @IEA. Not worth the risk for shippers. Problem with the 0.5% VLSFO alternative is that it will be available, but not compatible. Not worth the risk. Shippers will go for Marine Gasoil (MGO) in size until comfortable.
Read 7 tweets
FRIDAY MORNING IN ENERGY: And I’d like to talk energy, but really, I’ve got to talk trade first after we’ve got new tariffs coming, a lot of research notes, and very nervous markets… #OOTT #tradewar #China #trade
… as always you can follow our coverage here on Our lead story right now is, the US escalated the trade war with more tariffs after the Chinese made major changes in the agreement that blew everything up earlier in the week.…
Trump has said he’s in no rush to complete the deal. So we’ve got that going for us. #trade #china Ttradewar…
Read 26 tweets
1/#IMO2020 is the most significant change to the global refining complex in my lifetime (..however I'm a millennial..sort of) #OOTT
2/#IMO2020 is all about getting rid of ~3.0mln bbls/d of #oil demand and creating ~3.0mln bbls/d of new supply #OOTT
3/#IMO2020 is a play on how confident shippers are (or not) using this new 0.5% blend of marine fuel #oil. Its more of a problem when there is no consensus on what will be gonig into the 0.5% blend. #OOTT
Read 8 tweets
#demographics #militaries #economies #currencies
- Best demographics
- Largest military
- Largest economy
- Most used currency
- Liquid financial markets
- Open capital account
- Rule of law
- Best geography
- Can be self sufficient if required
- Not trade dependent
Top trade partners as of 30 June 2018:
- China: 15.2% (strategic competitor)
- Canada: 15.1%
- Mexico: 14.6%
- Japan: 5.1%
- Germany: 4.4%

The next 10 years could result in the below:
- Mexico (25%)
- Canada (20%
- Japan (7%)
- South Korea (5%)
- Great Britain (4%)
Bring the manufacturing (jobs) home while negatively impacting China's economy.………
Read 338 tweets

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