Rental income from supertankers may jump as high as $150,000 a day as demand revives, Svenska Handelsbanken AB said as it advised buying shares of Frontline Ltd. (FRO), the world’s biggest operator of the vessels.
“We expect crude-oil tanker demand to pick up starting in the second half of 2010,” Oslo-based analyst Christian Dyvik said in an e-mailed report today. A rebound may mark the start of a “multi-year” cyclical increase in demand, he said. The forecast for income applies to the “near future.”
Handelsbanken initiated coverage of Frontline with a “buy” recommendation and said it expects the stock to rise to 252 kroner ($41.81), implying a 35 percent advance from the current price.
Rental income from shipping Saudi Arabian crude oil to Japan, the tanker industry’s benchmark route, has dropped 30 percent in four trading sessions. The decline may represent a good time to purchase Frontline shares, Dyvik said. The stock has climbed 15 percent in 2010 after losing more than a third of its value over the prior two years.
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