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(Reuters) - Oil tanker operator Teekay Tankers Ltd (TNK.N) expects a better first quarter than last year, its chief executive told Reuters, echoing views of sector-bellwether Frontline (FRO.OL) (FRO.N) that demand has picked up considerably in recent weeks.
The tanker market was hit hard last year, mainly due to oversupply, with average daily rates for smaller classes of vessels falling to a low of $4,400. Rates have quadrupled now.
"We follow pretty closely to the tanker market. This quarter rates in general have been up, and so we expect our rates to go up as well ... we expect this quarter to be better than the first quarter last year," Teekay Tankers CEO Bruce Chan said.
The company had reported a profit of 12 cents per share and sales of $31.7 million in the first quarter last year. For the current quarter, analysts are expecting a profit of 4 cents, on revenue of $31.4 million, according to Thomson Reuters I/B/E/S.
On Thursday, Frontline's chief executive told Reuters demand has risen on surprisingly high activity from ships transporting oil to China.
"Overall for this year, we think that the supply and demand picture for tankers is balanced," Teekay Tankers' Chan, who is in his late thirties, said.
Bermuda-based Teekay Tankers, formed in 2007 by Teekay Corp (TK.N), could also look at buying product tankers -- which are used to move petrochemical from refineries.
Its shares were trading up 11 percent on Friday afternoon on the New York Stock Exchange. Stocks of Overseas Shipholding Group (OSG.N) and Nordic American Tanker Shipping (NAT.N) were also up after Frontline's comments boosted investor confidence.
Frontline's U.S-listed shares jumped up 25 percent on Friday and were one of the top percentage gainers on the New York Stock Exchange.
Reporting by Divya Lad in Bangalore; Editing by Supriya Kurane