Morgan Stanley Says Tsakos Energy May Be Only Attractive Tanker Amid Downturn

Sailing through a cyclical downturn, Morgan Stanley’s Fotis Giannakoulis downgraded multiple tanker names including U.S. listed DHT Holdings DHT. Giannakoulis believed the oil downturn could last through 2018.

Global Outlook

“Crude supply in Latin America and West Africa have been in decline, and Middle East production is slowing while domestic refinery capacity rises” stated the analyst. Giannakoulis believed Middle East net export growth would slow from 0.8-0.9 mbpd to 0.1-0.2mbpd in 2017-2018.

Additionally, the 15 percent cut in capital expenditures over the last two consecutive years in tanker operators have led to an overall decline in drilling activity, according to the Morgan Stanley analyst.

The Pin In The Haystack

Despite negative industry trends, Giannakoulis remained overweight on Tsakos Energy Navigation TNP.

Tsakos Energy Navigation closed Thursday at $5.02, up 1.01 percent.