Gasoline Cargoes to U.S. Slide on High Prices at Pump, Weak Demand

Gasoline shipments from Europe across the Atlantic Ocean will decline during the next two weeks because of rising fuel prices and weaker demand in the U.S.

Twenty-seven tankers were booked or due to be chartered for loading in the two-week period, according to the median estimate in a Bloomberg News survey of five shipbrokers, one owner and two traders yesterday. That’s a decline of 6.9 percent from last week.

“U.S. refineries have cut production, gasoline prices are still high, and demand for gasoline from Europe is weak because of deteriorating economic activity,” Eugen Weinberg, head of commodities research at Commerzbank AG, said by phone from Frankfurt today.

Bloomberg’s weekly Consumer Comfort Index’s monthly expectations gauge dropped to minus 45, the worst reading since February 2009. The weekly measure of current conditions was minus 48.4 for the period ended Oct. 16, up from minus 50.8 the prior week that was close to a record low.

Pump prices for regular gasoline increased 0.5 cent to $3.474 a gallon on average nationwide on Oct. 18, according to the American Automobile Association. That’s the highest level since Sept. 26. Refined oil product imports fell to the lowest level in 12 years, according to the U.S. Department of Energy.

Medium-Range Tankers

Of the 27 vessels in the survey, known in the industry as medium-range tankers, 14 have been booked and 13 more will probably be hired, according to the responses. They will be able to carry about 8.5 million barrels of gasoline, or 607,000 barrels a day over the next two weeks. The daily rate is 74 percent of the 824,000 barrels the U.S. imported over the past year, according to the U.S. Department of Energy.

There are 31 vessels likely to be available to carry trans- Atlantic gasoline cargoes, three more than in last week’s survey, and 11 more than a month earlier, the survey showed.

Daily rental income for tankers carrying the fuel across the Atlantic Ocean fell 9.1 percent to $3,590 today, according to the Baltic Exchange in London. That’s the lowest return since Sept. 19, data from the exchange show.

The survey is based on so-called single-voyage, or spot, charters and excludes loadings under longer-term contracts. It assumes shipments to the U.S. East Coast from northwestern Europe. Each tanker would normally haul about 37,000 tons of cargo, or 315,000 barrels.

Charter rates on the route fell 1.1 percent to 135.42 industry-standard Worldscale points, according to the exchange.

The points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific 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 reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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