The broad equity markets have enjoyed another strong performance in the month of May. OPEC+ supply cuts of around $ 9.7mn/barrel have supported the oil price. The price of Brent oil has gone up from $ 25/barrel to $ 35/ barrel at the end of the month. The flattening term structure curve of the oil market made has led to less term charter hiring by oil traders. Hence, VLCC spot- rates (Very Large Crude Carrier) have decreased from $ 129k/day to $ 64k/day and tanker stocks have sold – off. Within the fund the 10% correction in crude and product tanker stocks was used to re-establish positions as tanker earnings are expected to remain at strong levels in Q2, thereby enabling tanker operators to earn between 20-40% of their current market capitalisation for the entire year. Within aviation most budget airlines have generated strong returns. The overall fund result was positive. Hedging positions have lowered the return in the calendar month.
More detailed fund information can be found in the attached Factsheet May 2020.
Seahawk Investments GmbH