Seanergy ($SHIP) operates as an international shipping company specializing in the worldwide seaborne transportation of dry bulk commodities. It focuses on owning and management of fleet of Capesize bulk carriers. Investors get bullish on ship related stocks like Tops Ships ($TOPS) and Seanergy ($SHIP) on recent news of upcoming oil and gas production cut.
Drilling, tanker and ship vessel stocks are seeing high surges as oil and gas production will be cut leaving prices bleeding out. Yesterday brent crude oil prices fell 3% and settling at $33 per barrel.
With tensions rising, the next meeting has been delayed and officials are expected to meet again on Thursday in an attempt to agree on production cuts.
American drillers are still pumping near-record levels as the world is coming to the edge of its ability to store oil.
To prevent this, U.S. oil executives met with the president Friday at the White House, and there was speculation he would ask them to cooperate in cuts. No agreement came of the meeting, but Trump did seem to reflect an industry view that market forces should determine prices.
But even if a deal is reached, many argue that prices will stay lower for longer due to the unprecedented demand destruction caused by the coronavirus. In other words, the supply side is a secondary story to the demand hit.
If OPEC+ can’t decide on what it wants to do we could see Brent crude oil prices fall below $20 and eventually to single digit lows.
Analysts predict Oil Prices to stay low
Analyst Thom Payne, Director of Westwood Global Energy Group claims the U.S. oil industry is ‘fragmented.’
So, trying to get an equitable position where they can all cut, that’s going to be very, very difficult, Even if we do get some type of supply cut deal, it’s a demand side issue as well, Regardless of what we cut from the supply perspective, you’re going to be pushing on a string because you’re never going to be able to move enough oil off the market right now or next month to help balance things out here.
Thom Payne – Driector of Consultancy @ Westwood Global Energy Group
Stock traders often pay close attention to what Wall Street analysts have to say about a potential investment. For Seanergy ($SHIP), the latest consensus recommendation available followed its financial results for the fiscal quarter ending in Invalid Date. On average, stock market experts give SHIP an Buy rating. The average 12-month price forecast for this stock is $2, with the high estimate being $1.14, the low estimate being $0.50 and the median estimate amounting to $0.82. This is compared to its latest closing price of $0.16.
Looks like L1 Captial completely agrees with this stance as they also bought in according to a recent filing.
