The Middle East trade may be entering a new phase. Oil prices have retreated sharply this week as signs of progress in U.S.-Iran talks eased some fears of a broader regional disruption. The United States Oil Fund (NYSE:USO), one of the most widely followed proxies for crude oil prices, has fallen nearly 15% over the past five trading days.
Yet many tanker and shipping stocks are refusing to follow oil lower.
Frontline Plc (NYSE:FRO) is up 3.5% over the same period, while Scorpio Tankers Inc (NYSE:STNG) has gained 0.7% and Teekay Tankers Ltd. (NYSE:TNK) remains in positive territory. Broader shipping names have also held up relatively well, with Star Bulk Carriers Corp. (NASDAQ:SBLK) rising 0.5% over the past week.
The divergence suggests investors may be focusing on something other than the price of oil itself.
The Market May Be Trading Freight, Not Crude
