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Tanker group Euronav confident of upturn after stormy third quarter

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By Juliette Portala

(Reuters) -Euronav on Thursday pointed to a recovery in freight rates, after the oil shipping and storage operator swung to a loss in a "challenging" third quarter.

The tanker industry has been under pressure this year as global crude oil exports have been constrained by OPEC+ output cuts and as COVID-19 outbreaks have continued to depress demand, delaying any recovery in freight rates.

But the Antwerp-based group, which provides crude oil shipping and storage services, flagged positive developments contributing to a strong recovery in activity since early September.

Euronav's shares pared early losses to stand 3.2% higher at 0840 GMT, before moving to trade almost flat on the day.

"There is light at the end of the tunnel," analyst Olivier Vandewoude from KBC Securities said, pointing to a low rate environment in the third quarter.

The group, one of the largest oil tanker companies in the world, reported a third-quarter net loss of $105.9 million, against a profit of $46.2 million a year earlier.

"We have every reason to be confident that we have now come through the trough of this particular cycle," Chief Executive Hugo De Stoop said, describing its third quarter as among the most challenging for its market in recent memory.

He also highlighted additional demand for fuel oil as energy producers are switching to a cheaper solution, and that OPEC+ production growth is translating into exports.

"We believe the share price might react cautiously on the numbers and the fourth-quarter outlook," ING analyst Quirijn Mulder wrote in a note to clients, but added that the fundamental story was solid, with good market outlook and a company which is ready for the uptick.

The Organization of the Petroleum Exporting Countries, Russia and their allies, known as OPEC+, are set to meet later on Thursday, and, according to sources, are likely to stick to existing output increase plans.

(Reporting by Juliette Portala ; editing by Jane Merriman)

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