Bermuda-based shipping company Teekay Tankers Ltd saw its profit rise in the third quarter as spot charter rates for its oil and gas tankers increased.

Teekay, which owns 51 tankers of various sizes, reported net income of $41.2 million, or 30 cents per share, up from $5.9 million, or seven cents per share in the third quarter of last year.

The earnings fell short of Wall Street analysts’ expectations for 35 cents per share, as Teekay’s revenue for the quarter more than doubled to $125 million.

Bermuda-based tanker operators like Teekay and Nordic American Tankers have benefited from low oil prices, which have resulted in some tankers being used for storage by investors intending to sell in a few months for a higher price, and from some countries ramping up supplies of oil while it is cheap.

Kevin Mackay, Teekay Tankers’ chief executive officer, said: “During the fourth quarter to date, crude spot tanker rates have strengthened and remained firm.

“We expect crude spot tanker rates to increase further for the remainder of 2015 and into the first quarter of 2016, mainly due to higher expected oil demand related to colder weather in the northern hemisphere, the continued building of strategic and commercial petroleum reserves in China and India, and the potential for weather and transit delays that could further support rates.

“With an expanded fleet, we expect our free cash flow generation will mirror the expected strong rate environment in the fourth quarter of 2015 and into 2016.”

The company boosted its fleet with the acquisition of ten Suezmax tankers in the third quarter.

Subsidiary Teekay LNG Partners (TGP), predominantly a specialist shipper of liquefied natural gas and also based in Bermuda, yesterday announced distributable cash flow of $61.1 million for the third quarter, up from $64.2 million in the same quarter last year.

The company said the decrease was due to the termination of two charter contracts and the sale of one tanker.

Peter Evenson, TGP’s chief executive officer, said: “The partnership generated stronger-than-expected distribution coverage in the third quarter, primarily due to higher than expected revenues from our Exmar LPG joint venture.

“Teekay LNG’s distributable cash flow remains stable and growing. The partnership’s diversified portfolio of fee-based contracts, with no direct link to commodity prices, comprises fixed forward revenues of approximately $11.3 billion.”

The company has a fleet of 48 LNG carriers, 30 liquefied petroleum gas/multigas carriers, and eight conventional tankers.

TGP, which pays out virtually all of its profits to unit holders, announced a distribution of 70 cents per unit, representing an annualised yield of about 10.8 per cent based on yesterday afternoon’s unit price of $25.80 in new York trading.

“Our project teams remain focused on the execution of the partnership’s growth portfolio, including delivery of the world’s first ever MEGI LNG carrier newbuildings,” Mr. Evensen continued.

MEGI-propelled LNG carriers are designed to be significantly more fuel-efficient and have lower emission levels than other engines currently being used in LNG shipping.

“The first two of the partnership’s MEGI LNG carrier newbuildings are expected to deliver starting in early-2016, with the first vessel having recently commenced sea trials and the second vessel having been launched at the shipyard during the third quarter,” Mr Evenson added.