Frontline beats forecast as oil tanker market improves
Innkommet 16.11.2018 17:45

* CEO says increasingly upbeat on tanker profits
* Adjusted for one-offs, Q3 loss $8.4 mln
* OPEC cuts, Iran sanctions may impact tanker demand

(Adds CEO quotes, details)
OSLO, Nov 16 (Reuters) - Frontline , one of the
world's largest oil tanker firms, posted a surprise
third-quarter profit on Friday, helped by rising rates for its
fleet.
The Oslo-listed shipper, controlled by billionaire investor
John Fredriksen, said the outlook was improving due to rising
global demand for crude after a lengthy downturn for shippers.
"We are increasingly optimistic that the tanker market will
generate profits going forward," Chief Executive Robert Hvide
Macleod told an investor call.
Net earnings for July to September swung to a profit of $2.2
million from a $24.1 million loss in the same period last year.
Adjusted for one-off gains, the company lost $8.4 million in
the quarter but still beat a forecast loss of $21.9 million in a
Reuters poll of analysts.
Frontline, which will not pay a dividend for the third
quarter, rose 4.7 percent in early trade but gave up most gains
to trade flat at 53.25 Norwegian crowns by 1515 GMT, lagging a
0.8 percent gain for the Oslo benchmark index.
"Oil inventory draws, fleet growth and production cuts have
been against us, but these important factors are now turning in
our favour. The most important factor, oil demand, remains
strong," the company said in a statement.
Global oil supply rose this year compared with 2017, helping
the tanker market, Frontline said.
In October, global output stood at 100.7 million barrels per
day (bpd), 2.6 million bpd more than a year ago, the
International Energy Agency said.
A fall in the Brent crude price has sparked renewed talk of
production cuts by the Organization of Petroleum Exporting
Countries.
"Obviously, it would be negative," Macleod said of any new
cuts. But he downplayed the impact: "I don't think it's going to
be a showstopper."
U.S. sanctions on Iran could mean more oil being transported
from the United States, where production has been surging,
Frontline said, adding this could help the tanker market.
Frontline also said it has ordered exhaust gas cleaning
systems for 12 more vessels, which it said would make its fleet
more attractive when tougher international emissions regulations
kick in from 2020.
It has so far announced plans to install so-called
"scrubbers" on 20 of its vessels, including two new tankers
being built.
The company owns 46 very large crude carriers (VLCCs),
Suezmax and Aframax tankers, and leases or manages another 17.

(Reporting by Terje Solsvik and Nerijus Adomaitis
Editing by Ole Petter Skonnnord and Edmund Blair)
((terje.solsvik@thomsonreuters.com; +47 918 666 70; Reuters
Messaging: terje.solsvik.thomsonreuters.com@reuters.net))

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