Gasoline Rebound in U.S. Fans Europe's September Exports: Energy Markets
Gasoline Rebound in U.S. Fans European Exports
Gerard Julien/AFP/Getty Images
Tankers are blocked by strike workers at the entrance of Fos-sur-Mer's oil terminal in Fos-sur-Mer, France.
Tankers are blocked by strike workers at the entrance of Fos-sur-Mer's oil terminal in Fos-sur-Mer, France. Photographer: Gerard Julien/AFP/Getty Images
Bookings of tankers to ship European gasoline across the Atlantic increased in September as the profit margin from the trade rebounded from the least in a year and U.S. supplies fell to a three-month low.
Traders and oil companies chartered at least 29 vessels to transport the auto fuel to the Atlantic Coast last month, up from 23 in August, according to data compiled by Bloomberg and Clarkson Research Services Ltd., a unit of the world’s biggest shipbroker. The ships carried 1.12 million metric tons, compared with 971,000 tons in August.
“A lot of U.S. refineries are in maintenance, so gasoline needs have to be met by imports rather than domestic production,” said Amrita Sen, an oil analyst at Barclays Capital in London.
The premium, or arbitrage margin, on U.S. gasoline relative to Europe averaged 3.4 cents a gallon in the last week of September. It was minus 7 cents on Sept. 16, the lowest level since Sept. 1, 2009.
Gasoline prices have advanced since the end of September as at least 10 refineries in Europe were forced to reduce output amid a port workers’ strike at oil terminals in southern France. As few as three ships were hired to transport the fuel to the U.S. from Europe in the first week of October.
Backwardation
Price gains in Europe outpaced the U.S. as companies including Paris-based Total SA lost 800,000 barrels a day in fuel production, according to the International Energy Agency. European 95-octane gasoline in Amsterdam-Rotterdam-Antwerp traded at $791 a ton, or $2.22 cents a gallon, today, up 12 percent this month, Bloomberg data showed. Futures on the New York Mercantile Exchange fell 1.4 percent to settle at $2.1365 a gallon.
Reduced European output sent the U.S. futures market into so-called backwardation on Oct. 4, meaning contracts for nearby delivery traded higher than shipments in subsequent months, a typical signal that supplies are squeezed.
Inventories fell 0.8 percent in the week ended Oct. 8 to 218.2 million barrels, the lowest level since the week ended June 25, the Energy Department reported in Washington today.
Refinery maintenance, increased demand and the French strike “have put the gasoline forward curve into backwardation and opened the trans-Atlantic arbitrage,” said Filip Petersson, Stockholm-based commodities strategist at SEB AB. “We should clearly see more shipments from Europe to the U.S.”
Autumn Repairs
Refiners in the U.S. and Europe usually carry out repairs in the spring, ahead of the peak motoring season, and autumn, before falling temperatures stoke demand for heating oil. U.S. producers operated at 81.9 percent of capacity in the week ended Oct. 8, the lowest level since the seven days through March 19, government data showed.
The average pump price for regular gasoline rose to $2.76 a gallon in the U.S. in the week ended Oct. 8, the highest level in eight weeks and up 13 percent from a year earlier, MasterCard Inc. said on Oct. 12 in its SpendingPulse report.
The profit in Europe from turning crude into gasoline, the so-called crack spread, widened to $5.05 a barrel on Oct. 11, the most since Aug. 31 and double the $2.25 on Oct. 1, according to PVM Oil Associates Ltd., an independent broker that handles more than 100 million barrels of oil derivatives a day.
Gasoline inventories in independent storage fell 3.3 percent to 889,000 tons in the week through Oct. 7 in Amsterdam- Rotterdam-Antwerp, Europe’s oil-trading hub, according to PJK International BV, an Oosterhout, Netherlands-based petroleum- industry researcher.
Six Tankers
Statoil ASA, Norway’s largest oil and gas company, booked at least six tankers to move 245,000 tons in September, Clarkson data showed. The Stavanger-based company hired two ships in August.
The Gotland Marieann loaded Sept. 30 in the U.K. and was scheduled to reach New York on Oct. 16, according to AISLive vessel-tracking data on Bloomberg. The Energy Puma left Norway Sept. 21 and arrived Oct. 9, the data showed.
The fixtures from London-based Clarkson were drawn from single-voyage bookings. Long-term charters weren’t included.
The cost of shipping gasoline from Europe to the U.S. Atlantic coast was unchanged at Worldscale 137.73 today, or about $5,198 a day after fuel costs are taken into account, according to the London-based Baltic Exchange.
Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
To contact the reporters on this story: Rachel Graham in London rgraham13@bloomberg.net; Moming Zhou in New York at Mzhou29@bloomberg.net
To contact the editors responsible for this story: Stephen Voss at sev@bloomberg.net; Dan Stets at dstets@bloomberg.net
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