Frontline Ltd. (NYSE: FRO) is a shipping company that transports crude oil and, less frequently, dry cargo. The company derives most of its revenue from short term (single voyage or per day) contracts. These contracts are more lucrative than longer term contracts, but are also less predictable in terms of their frequency.
FRO's business depends on demand for petroleum and petroleum products. In recent years, the breakneck pace of economic development in countries like China and India has led to increasing demand for oil. FRO has benefited from this trend as the world's growing appetite for oil has led to increasing employment opportunities.(Read more at Wikinvest )
- Company Overview
- Business and Financial Metrics
- Trends and Forces
- The growth in world oil demand drives Frontline's business
- The growth of trade in liquefied natural gas (LNG) could turn the tanker industry's focus away from crude oil transportation
- Developments in alternative energies could, in the long-term, result in a decrease in oil demand