Breadnight

Super Tankers and Super Volatile Oil Prices

BTW, keep up the good work Reggie, even when I do not agree with you I enjoy the research based analysis.

Super Tankers and Super Volatile Oil Prices

Paultaut: I am sure Petrobras will utilize a pipeline to transfer it's petroleum production the 300 miles to shore.

I believe Reggie's summation, which we hinted at, would be to sell into the strength in these shipping companies. Their business models did not include this storage aspect a year ago. It is a plus to them in the short term, but indicates how weak their core business model is currently performing.

If you believe crude prices will continue to collapse (which I do), shorting these crude transporters is a good high beta play. I would recommend a strategy of shorting the shippers that couldn't make money during the boom times, those will be the ones to go under in the future.

The catch: is the recent strength in the shipping co's due to the storage issues due to crude contango, or is it value investors picking the bottom? Why has DRYS seen recent (huge) strength, they don't have crude vessels (that's not a fact, but I'm moderately sure of it)??

-if you're shorting an equity b/c of a flawed fundamental factor, you should make sure the recent strength is due to that factor. In this case I am not sure that is true... Your thoughts??