US-listed shipping stocks fell across the board today as a result of falling oil prices and ongoing US-China trade tensions, according to analysts.
West Texas Intermediate futures slipped 4% to $51.14 per barrel, while Brent crude, the international benchmark, fell 3.7% to $59.97 — both reaching lows not seen since January.
The price fall is driven by US crude-oil supplies rising by 2.2 million barrels last week, according to US government data, as OPEC looks to limit oil supply.
At the same time, the trade war between US and China is stoking fears of slowed economic growth, putting downward pressure on demand for energy and consumer goods.
Boxship owner Globus Maritime shares fell the most, cascading 12.7% today to close at $2.55 while dry bulk Seanergy Maritime declined 11.7% to $0.72.
Other shipping equities that took a hit include Scorpio Tankers, falling 9.2% to $23.66, and boxship specialist Euroseas, which declined 7.1% to $0.61. Bulker owner Golden Ocean Group also fell 7.1% to $4.48.
"Crude prices falling 4% is certainly pushing the tanker and LNG names lower, and the ongoing US-China trade war isn’t helping," Jefferies analyst Randy Giveans tells TradeWinds.
"Also, OPEC countries discussing prolonged production cuts doesn’t bode well for tankers, although other demand drivers such as increased US and Brazilian crude exports, the conclusion of refinery maintenance season, and IMO 2020 will certainly push the market higher in the coming months."
Handful of gains
All told, almost 30 US-listed shipping stocks declined today with only a small handful of shipping companies posting slight gains.
Dynagas went up 1.2% to $1.73 while Nordic American Tankers ticked up 0.5% to $2.04 and boxship owner Matson enjoyed a 0.7% rise to $36.63.
The tit-for-tat tariff spat is also placing negative sentiment on dry bulk and container shipping sectors by threatening to lessen trade between the world's two largest economies, Giveans said.
"Investors who can stomach the incredible short-term volatility will be rewarded later this year, especially if and when we get some kind of trade deal," he said.
Deutsche Bank analyst Amit Mehrotra agreed, saying the market seems particularly sensitive today to US-China trade risks.
"In shipping, my mantra is: it’s never as good as you think, and always worse than you fear," he said.
Stifel analyst Ben Nolan summed up shipping's lackluster day in five words.
"Bad oil and economic data," he told TradeWinds.